Advanced single-sided yield farming strategy — Bastion Lending Vault

3 min readJun 30, 2022

🍎Nothing is more joyful than single-sided stable farming in a bear market. We’re delighted to present you the best-in-class single-sided yield farming strategy to make sure your portfolio outperforms in the long run:

Folding strategy + Auto-compounding + BBT rewards

To kick things off, the Bastion USDC vault is now open for deposits. BBT rewards will be turned on for the pool at approximately 11:00 AM UTC today, BlueBit users who deposite USDC will start earning extra BBT yield immediately

What is a folding strategy?

Take Bastion USDC pool as an example: Supply USDC, borrow USDC, supply more USDC, borrow more USDC, and repeat.

Here you leverage your supply and borrow positions on the Bastion Protocol, to earn both supply and borrow rewards. Your borrow ratio will slowly increase over time as your borrow balance will increase at a faster APY than your supply balance.

What exactly are BlueBit vaults

Our vaults farming on Bastion Protocol use a single-token leverage strategy mentioned above to 3.14X your yield — essentially for every 1 token users deposit in our Vaults, we supply 2.07 tokens and borrow 1.07 tokens from the Bastion protocol, using about 76% of our borrow limit.

Plus, our vaults will automatically harvest $BSTN, swapping into more $USDC and compounded in the vault.

The borrow ratio is rebalanced on every harvest, deposit and withdrawal from the Vault.

Despite BBT rewards, your APY is enhanced from 0.02% to 1.65%, indicating an 83X improvement.

Low risk, even with leverage. The liquidation risk is minimal as you are only exposed to a single asset.

All you need to do is deposit, sit back, and relax.

Smart contract process

There are essentially 3 types of transactions our Vaults do:

1. Deposit
User deposits tokens into our Vault. We supply the tokens to Bastion, and if needed, borrow and supply more underlying tokens to reach our target borrow limit of 76%.
2. Harvest
For every 4 hours, a harvest will be conducted by our Vault which harvests BSTN from Bastion, and swaps it for more of the (vault’s) token. We supply the tokens to Bastion, and if needed, borrow and supply more tokens to reach our target borrow limit of 76%.
3. Withdraw
User withdraws tokens from our Vault. We redeem tokens from Bastion, and if needed, repay and redeem more tokens to reach our target borrow limit of 76% after sending the withdrawn tokens to the user. The redeemed amount will be ~1X to ~2.14X of the amount withdrawn depending on how large the withdrawal is. It will only reach ~2.14X if the entire Vault is withdrawn at the same time.

Ready to give us a try? http://www.bluebit.fi/vaults

Fees

As usual, an 8% fee will be charged from users’ profits. No deposit fee and withdrawal fee.

ALL APY displayed are fee-deducted.

About BlueBit

BlueBit Finance, a proud Aurora grant recipient, is a yield aggregator protocol deployed on Aurora. The protocol allows users to earn more yield from DeFi farming in a more secure, accessible, and efficient manner.