Fund Allocation Proposal #23

[leomorozovskii]

Liquidity Farming with Compound.Finance

GOAL Maximizing COMP rewards from current stake

Rationale Compound.Finance launched COMP liquidity incentive program, where every liquidity provider gets COMP token rewards 50/50 for supplying and borrowing liquidity proportionally to overall liquidity

https://twitter.com/compoundfinance/status/1272618778140872704

Strategy Supplying and borrowing Dai asset maximizing COMP mining

Tech details

• opening InstaDapp account
• Buying Dai asset
• Supplying Dai into Compound with InstaDapp
• Taking a flashloan in DAI and supplying into Compound
• Taking a loan in Compound to repay flashloan

Result 40-50% APY in COMP depending on the price of COMP 97% lqiuidity rate

Risks

• smart-contract drainage
• bank run
• governance proposal for changing collateral factor of DAI