How to Maximize Gains on Sui with Minimal Risk

Sui’s DeFi ecosystem is growing fast. This means there are several opportunities to make a profit.

However, as you know, the crypto market is pretty volatile. So, the chances of losing big if things go south are also high. Let’s discover more about this interesting strategy for Sui.

Step 1: Stake Sui for Liquid Staking Tokens (LST)

But with the right strategy, you can maximize your gains while keeping risks low. Twitter user @0xjulian76 shared a good strategy top Sui users use to minimize risk and maximize profit. In this article, we are breaking down this approach. Note that this is not financial advice.

The first step is staking SUI to earn a passive income while maintaining liquidity. Platforms like Haedal Protocol offer liquid staking with an estimated 2.75% APR. Haedal is also launching a token, meaning that staking here could position you for a potential airdrop.

Step 2: Use haSui as Collateral to Borrow Sui

Once you have haSui from Haedal, deposit 50% of it as collateral on Scallop and borrow Sui at a net APR of 4.23% (13.45% borrowing rate minus 9.22% supply APR). This step allows you to access extra liquidity while still benefiting from your staked Sui.

Step 3: Borrow USDY with haSui Collateral

The remaining 50% of haSui can also be used as collateral on Scallop to borrow USDY, Ondo Finance’s tokenized yield-bearing stablecoin. The net APR for this move is 8.23% (29.77% borrowing rate minus 21.54% supply APR), further increasing potential returns.

Step 4: Liquid Stake Borrowed Sui on Aftermath

Take the borrowed Sui and stake it with AftermathFi to receive afSui, which yields 2.47% APR. This keeps your assets productive while preparing for the next step.

Step 5: Provide Liquidity on Aftermath

Now, use the afSui and the borrowed USDY to create a 50/50 liquidity pair on AftermathFi’s V2 LP. Locking it for 14 days earns an impressive 50.95% APR.

Calculating the Final APR

Adding up the APR from each step gives a total estimated APR of 45.62%:

• Staking haSui: 2.75%
• Borrowing Sui: 1.58% (adjusted for collateral weight)
• Borrowing USDY: 3.08%
• LP Staking: 38.21%

Risk Considerations

This strategy minimizes risk compared to leverage-based approaches. However, monitoring your USDY and Sui collateral risk on Scallop is where the work lies. If prices fluctuate significantly, liquidations could occur. So, staying within safe borrowing limits is key.

Conclusion

This is a strong, relatively low-risk strategy for maximizing returns on Sui. If you plan to follow this user’s plan, make sure you have a good risk appetite. Also, ensure you understand the Sui ecosystem and are familiar with staking. As always, do your research and manage risk wisely!

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers, and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.