Leverage yield farming

Yield farming is a process in which users (or farmers) receive additional incentives (typically in the form of another token) for providing liquidity to a liquidity pool on a certain AMM protocol, such as LiquidSwap, AUX Exchange, PancakeSwap, etc.

For instance, if you were to provide liquidity of 10 APT and 100 USDC (assuming 1 APT = 10 USDC) to a APT/USDC liquidity pool on LiquidSwap, then you will receive rewards in another token (e.g. 10 Token A) in addition to a share of trading fees that the protocol gains (e.g. 10% APY), which you would normally receive for being a liquidity provider on any AMM.

Leveraged yield farming is a concept that allows farmers to lever up their yield farming position by borrowing external liquidity to add on their yield farming position. This results in users earning higher APY exceeding the limit set by DEX protocols. By taking on leverage, EZ-FI would borrow the specified assets on behalf of the users to yield farm.

This will give them a bigger position at the end. As a result of having more liquidity to yield farm, leveraged yield farmers gain more rewards in Token A and a larger share of the trading fees than before. (e.g. Referring to the original position of 10 APT and 100 USDC in APT/USDC pool, a user can borrow 20 more APT, adding up to 30 APT and borrow 200 USDC, adding up to 300 USDC.)