Lending & Borrowing
Boost your APYs
Lending
You can lend USDC against EVITA collateral. Loan-to-Value (LTV) is 80%. Total APY is 20%, which compounds from: Basic APY paid by borrowers — 4% Extra APY paid by the protocol — 16%
Extra APY is paid in EVIDAO tokens. These tokens receive 25% of all protocol revenue, and has intrinsic value due to this. You can read more about EVIDAO tokens here.
Borrowing
You can borrow USDC at 80% LTV and 4% APY against your EVITA. Plus, a one-time 0.5% protocol fee.
It will provide two opportunities:
1. Instant liquidity
You buy EVITA for 1,000 USDC.
Put EVITA to the lending protocol.
Borrow 800 USDC.
Withdraw them wherever you want to.
5-20% APY made by EVITA will cover your 4% borrowing APY and a 0.5% protocol fee.
2. Leverage to increase APY
You can use 800 USDC to buy more EVITA.
And borrow 640 USDC more against it.
If you make it 7 times, you will get 45.5% APY on your leveraged position.
Liquidation risk
To evaluate liquidation risk, you can look at this page made by St.Louis FRED.
Even after the worst 2008 crash, driven mainly by mortgages, the average real estate price has fallen -23% in 5 years. However, that's only -6% per year if compounded.
The fastest and deepest real estate price dump was from Sep 2008 to Mar 2009, and it was only -9.6%. Considering 80% LTV, there's a tiny chance of liquidation during the year, even in another 2008-like crisis.
Important notice: Evita is not buying real estate at market prices. Therefore, the most significant contribution to real estate renovation business profits is buying properties under the market. In most cases, the discount is 20-30%. That means if there will be another 2008-like financial crash, and the real estate market prices will lose 23% in 5 years, we still have a high probability to not only keep ourselves within a positive APY range but to make profits.
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