Vault StrategiesVault B — Leveraged BTC

Vault B — Leveraged BTC Accumulation

Risk: High | Target APY: 20-40%+ (in BTC terms, when BTC rises) | Entry: BTC

Strategy

Vault B creates leveraged long BTC exposure through recursive CDP looping:

Deposit 1 BTC
  → Open CDP (80% LTV) → mint 0.8 BTC worth of moonUSD
    → Swap moonUSD → BTC via Ekubo
      → Deposit BTC into same CDP
        → Mint more moonUSD
          → Repeat until target leverage reached

At 80% LTV with 3 loops, effective leverage reaches ~2.5x. Maximum theoretical leverage is ~5x.

Key Mechanics

Leverage Tiers

LoopsEffective LeverageLiquidation Drop
1~1.8x-44%
2~2.4x-33%
3~2.9x-28%
4~3.3x-24%
5~3.6x-22%

Rebalancing

The keeper monitors position health factors. When HF approaches liquidation threshold:

  • Deleverage: Unwind one loop (withdraw collateral → swap to moonUSD → repay debt)
  • Add collateral: If vault has reserves, deposit more BTC to restore HF

Position Tracking

struct LeveragePosition {
    base_collateral: u256,     // original BTC deposited
    total_collateral: u256,    // after looping
    total_debt: u256,          // total moonUSD minted
    loops: u8,                 // number of leverage rounds
    effective_leverage: u256,  // total_collateral / base_collateral
}

API Reference

User Functions

fn deposit(ref self: TContractState, btc_amount: u256, target_loops: u8) -> u256
fn withdraw(ref self: TContractState, shares: u256)
fn get_user_leverage(self: @TContractState, user: ContractAddress) -> LeveragePosition

Keeper Functions

fn rebalance(ref self: TContractState)               // restore HF targets
fn deleverage(ref self: TContractState, loops: u8)   // unwind leverage loops
fn emergency_exit(ref self: TContractState)           // full unwind

Read Functions

fn get_vault_health(self: @TContractState) -> u256    // aggregate HF
fn get_total_leverage(self: @TContractState) -> u256
fn get_btc_exposure(self: @TContractState) -> u256    // total BTC controlled

Risks

  • Liquidation: If BTC drops fast enough, positions can be liquidated before the keeper deleverages
  • Swap slippage: Large moonUSD → BTC swaps may incur significant slippage
  • Compounding losses: Leverage amplifies losses when BTC price drops
  • Interest costs: Borrow fees and ongoing interest reduce net returns
  • Oracle latency: Stale prices can delay liquidation protection
Vault A — Delta-NeutralVault C — Yield Optimizer