Leverage cLQDR with MOR!
We are delighted to finally present to the community an exciting and long-anticipated benefit, which is the ability to use cLQDR as collateral to borrow our over-collateralized stablecoin MOR at a 0% interest rate.
In this article we outline how this is done, and the amazing leverage opportunity this presents to enhance your overall returns through cLQDR.
First, a Quick Recap…..
As you hold cLQDR, your cLQDR amount held does not increase, but the ratio of LQDR it becomes worth does increase. For example, if you bought 100 cLQDR when the cLQDR to LQDR ratio was 1:1, and then a year or so later, you’d like to sell your 100 cLQDR when the ratio is now at 2:1, then you would receive 200 LQDR after selling.
In addition to cLQDR’s autocompounding nature, 12.5% of cLQDR goes to veGRO holders on Fantom.
cLQDR can be minted directly on the MOR website, and also purchased on Beethoven-X; whichever gives you the best rate.
- Mint on MOR website: https://mor-ftm.growthdefi.com/clqdr
- Buy on Beethoven-X: https://cutt.ly/aFvwRHd
- General cLQDR analytics by LiquidDriver (cLQDR currently holds ~7% of xLQDR): https://analyticsliquiddriver.com/d/nn7x-DWgk/clqdr?orgId=1
- xLQDR holder analytics by LiquidDriver(cLQDR is currently #3): https://analyticsliquiddriver.com/d/uDGviL17z/xlqdr-holders?orgId=1
Benefits of cLQDR
Holding cLQDR has several benefits, including:
- Autocompounding xLQDR Rewards. cLQDR compounds all the token rewards that currently accrue to xLQDR (which includes LQDR, LINSPIRIT, BOO, SPELL and BEETS). The performance fees collected through strategies will also be returned to cLQDR in the same way.
- Bribes Optimization and Autocompounding. cLQDR optimizes and automatically compounds bribes, saving you time from having to determine what the highest paying bribes are, voting for them, and incurring gas fees.
- Borrow MOR for Free. cLQDR holders can leverage their cLQDR to borrow our overcollateralized stablecoin, MOR, without paying any interest to borrow. This means you can borrow at 0% interest and take advantage of using that MOR to purchase anything, including more cLQDR. MOR vaults also do not charge any fees to open a vault or close/repay your position.
- Increasing LQDR Buy Pressure. By owning cLQDR, hodlers are creating constant buy pressure for LQDR and since cLQDR perpetually buys and locks a significant portion of LQDR’s future supply.
- Tax Efficiency. cLQDR is much more tax effective for many people (NFA) because it doesn’t have any claiming or transactions to worry about. Since the amount of cLQDR doesn’t increase while it autocompounds, you just watch your ratio increase until you’re ready to sell.
- Arbitrage/Buy at a Discount. Users can occasionally buy cLQDR on Beethoven-x when cLQDR sells at a slight discount to its peg. Once the cLQDR buyback contract buys back significant amounts of LQDR, there will be even better arbitrage opportunities, since users can predict when cLQDR will go back to peg.
- cLQDR Payouts to veGRO Holders. veGRO holders (meaning GRO holders who have staked their GRO) receive the 12.5% cLQDR performance fee. This goes to veGRO FTM holders in the form of daily cLQDR payouts.
- LP Advantages. The Pirate in C pool on Beethoven-x allows users to create an LP for LQDR/cLQDR. In addition, because the pool is a metastable pool, there is very little risk for impermanent loss (IL).
- More Liquidity than fNFTs. cLQDR offers holders far greater liquidity than Financial NFTs, since any amount of cLQDR can be sold at any time for more than you bought it for.
How to Use cLQDR on MOR
cLQDR can now be staked as collateral on MOR, allowing you to borrow MOR at a 0% interest rate! This provide an incredible opportunity to apply leverage to your cLQDR position if you wish, with added exposure to the upside potential returns over time.
Follow this guide to stake your cLQDR with the option to borrow MOR and create a leveraged position.
Opening A New Vault
First make sure you have cLQDR in your wallet.
Click ‘Open New Vault’. From here you can select ‘cLQDR’ to deposit as collateral, as well as use the simulator to determine how much of the token you require (and how much MOR you can mint) to meet a particular collateralization ratio.
Click ‘Setup Proxy’. This is necessary to do when you have never created vaults from that wallet address (you only need to do this once per wallet). This will enable the protocol to open MOR vaults from your address.
Click ‘Enable Collateral’. (only needs to be done once for each ilk)
After that, you’ll be able to open the vault. Select how much cLQDR collateral to deposit and how much MOR to mint alongside your collateral. Please note that the minimum amount of MOR you can borrow must be 100 (or 0).
Click ‘Open Vault’.
Managing Your cLQDR Position
Once you have opened your vault and staked cLQDR as collateral, you can manage your positions in the Dashboard. This includes functions like:
- Deposits. Depositing more cLQDR collateral to decrease your liquidation risk, and/or mint extra MOR.
- Debt Repayments. Repaying your MOR debt to unlock your cLQDR collateral for withdrawal.
Please note that if your vault LTV (loan-to-value as measured by debt / collateral USD value) ratio ever goes above the liquidation ratio, your vault will be flagged for liquidation. Every few hours, the bot checks the vault balances and begins the liquidation process for vaults below the liquidation ratio. So if you realize you are getting close to your liquidation ratio, it is always best to either (1) repay some of your debt or (2) add more collateral in order to keep your LTV ratio healthy. And keep in mind that liquidations have a 15% penalty fee applied for liquidating large positions, it will also cost you slippage.
For more info on our stablecoin, MOR, and why it is one of the safest stablecoins you could have in your portfolio and why it is compared to the likes of DAI and USDC, see this article here. Happy (and safe!) leveraging, fellow pirates!