Stride is live with Nolus Protocol! Nolus is a new money market appchain, where you can borrow against stATOM and stOSMO. The unique thing about Nolus is that you can borrow up to 150% of your original deposit! This is because the borrow amount stays on Nolus as further collateral.
Note: To make a lease on Nolus or lend your tokens on Nolus, you need to transfer them to Nolus first.
Transfer stATOM/stOSMO to Nolus
- ccess Nolus at http://app.nolus.io. Start by launching the Nolus application and connecting your wallet. You will need a positive balance of either stATOM or stOSMO, depending on which you wish to utilize..
- Now you want to transfer tokens from your wallet to Nolus. Once you have connected your wallet, go to the Assets page and click Send/Receive. Choose your asset and collateral. Select the asset you want to open a leveraged long position on. You can use liquid staking derivatives like stATOM and stOSMO with these strategies for additional rewards.
- Click on Receive. Choose either Osmosis or Stride to transfer stATOM or stOSMO and input the amount you want to transfer.
Create a Lease
- Go to the Lease page, then click Lease New.
- Input stATOM as the down payment and enter the amount you want to deposit. From the dropdown list, select the asset you want to lease. After creating the lease, you'll gain access to the borrowed funds.
STRATEGY: Leveraged Long Position with stTokens
One strategy is to open a leveraged long-position.This strategy enables you to borrow an asset you believe will appreciate in value, amplifying your profits compared to simply holding it.
- Choose your Position Size. Watch your chosen asset's movement as you are responsible for closing your own position when you are ready. Be careful: Partial Liquidation Trigger is a critical number - if the price changes drastically, this is a volatility indicator signaling that you should close your position as soon as possible.
- When you're ready to lock in your gains and close your position, you can repay the borrowed amount along with any accrued interest. Your profit will be the difference between the borrowed amount and the increased value of the asset.
- Since you used a liquid staking derivative as collateral, you'll also earn staking rewards during this process. These rewards can help offset interest costs and potentially contribute to paying down the lease.
Alternative Strategy: Creating a Delta-Neutral Strategy with stTokens
Referred to by Nolus as the "Power Hedgooor" strategy, this method harnesses the potential of combining volatile assets and their liquid staking derivative counterparts to craft a delta-neutral approach. By implementing this strategy on the Nolus application, you can optimize your rewards while minimizing exposure to price risk. Here's how to do it:
- Acquire a position balance of USDC in your wallet. Deposit some amount ofUSDC on a traditional money market such as Mars Protocol or Umee.
- Within the same money market, you can borrow ATOM at a suitable Loan-to-Value (LTV) ratio.
- After obtaining borrowed ATOM, sell it for USDC and keep the USDC in your wallet. This element is simply the strategy of selling and holding. Otherwise, you can consider adding this USDC to Nolus Protocol's Liquidity Providers' Pool for added yield.
- You will then want to deposit stATOM into a DeFi Lease on Nolus Protocol. Acquire stATOM separately (do not use the USDC you're holding) and deposit it on Nolus. This allows you to amplify your exposure to the price fluctuations of stATOM.
