Analysis of High-Yield Strategies on TON: Methods to Achieve 80% Annualized Returns

In the decentralized finance (DeFi) space, the TON blockchain is developing at an astonishing pace. This article will introduce how to achieve an annualized yield (APY) of up to 80% through leveraged yield farming strategies within the TON ecosystem.

Development of the TON Ecosystem

As the TON Foundation invests heavily to support liquidity staking pools, the market demand for high-yield strategies continues to rise. To meet this demand, innovative financial products have emerged, providing users with high-yield opportunities in the TON DeFi ecosystem.

Main Product Introduction

Leverage Yield Farming

This is a strategy for enhancing returns, where users provide liquidity to decentralized exchanges and use leverage to amplify their returns. For example, if the base annual yield is 30%, using 3x leverage, the return can reach 90% (before deducting interest). Users only need to invest USDT as a single asset, without complex operations, and can automatically receive rewards, saving time and costs associated with manual withdrawals.

savings account

Users can earn interest by depositing tokens into a savings account, and these funds will be lent to participants in leveraged yield farms. The higher the demand, the higher the interest rate. This account is suitable for users who want stable returns while maintaining their token balance.

Optimize Liquidity Pool

Some platforms have designed liquidity pools optimized specifically for the exchange of TON, stTON, and tsTON, ensuring that users enjoy lower slippage during large transactions. Low slippage trading is particularly important as it allows users to effectively reduce costs during frequent asset conversions, thereby enhancing returns. These pools can also dynamically adjust with changes in market demand, ensuring liquidity of funds and improving trading efficiency.

Leverage Yield and Strategy

Leverage Yield Farm and Market Neutral Farm Strategy

Leverage yield farming allows investors to borrow additional funds to amplify the positions in yield farming. For example:

• No leverage used: Invest $1000, annualized 30%, receive $300 in profit after one year.
• Use 3x leverage: Total position of 3000 USD, annualized 30%, annual income reaches 900 USD.

Leverage strategies can exponentially increase potential returns, but they also come with borrowing costs and liquidation risks. Some platforms offer simplified interfaces that allow users to easily manage risks while maximizing profits.

The market-neutral farming strategy is designed to reduce the risks brought by price fluctuations. This strategy allows users to maintain stable returns whether asset prices rise or fall, avoiding directional risks.

Operation example: market-neutral farming strategy with 3x leverage

Assuming you hold 1000 USDT, and the price of TON is 5 dollars. Using 3x leverage to participate in yield farming, the total position is 3000 dollars:

• 1500 USDT deposited into the liquidity pool
• 1500 USD exchanged for TON, deposited into the liquidity pool

This position reduces sensitivity to price fluctuations of TON, achieving theoretical market neutrality.

Risks and Risk Management

High returns often come with high risks. When using leverage, special attention must be paid to the following two types of risks:

• Liquidation Risk: When the debt ratio exceeds a specific threshold, the system will automatically liquidate positions, selling assets to repay loans.
• Impermanent loss: When the asset prices in a liquidity pool change relative to the initial price, it can lead to reduced earnings. Even with a market-neutral strategy, significant fluctuations in the TON price may still affect the final earnings.

To help users manage risk, some platforms provide health factor monitoring tools that allow users to stay informed about the health status of their positions at all times. During periods of extreme price volatility, users can choose to close and reopen positions to rebalance the risk of impermanent loss.

Summary

The leveraged yield farming strategy on the TON blockchain provides investors with the opportunity to earn high returns. Whether it's leveraged yield farming or savings, these products are designed to simplify the operational process, allowing users to focus on enhancing their yields. However, high returns come with high risks, and liquidation risks and impermanent loss are potential challenges that cannot be ignored. Users are advised to use leverage cautiously, always monitor health factors, and adjust positions appropriately during market fluctuations to effectively manage risk and ensure investments can achieve ideal returns.