Long/Short Farming Strategy

What is Long/Short Farming Strategy?

Long Farming Strategy

When you believe that the price of the Non-stable Asset(NSA) will increase in the future, you can perform Long Farming Strategy to borrow USDC. Your position value will increase when the NSA price rise (or decrease when the price drops).

Short Farming Strategy

When you believe that the price of the NSA will decrease in the future, you can perform Short Farming Strategy to borrow the NSA. If the NSA drops within a specific price range, you will make a profit.

How does it work?

Long Farming Strategy

For instance, if you hold ETH and seek to generate yield, you may borrow an equivalent amount of USDC to create ETH-USDC LP, which can earn farming rewards on a DEX (such as Velodrome). Moreover, if you have a bullish outlook on ETH, you could leverage your position by borrowing additional USDC to open a 3X-long position. You can take the long profit when the price rises, while the high returns of leveraged farming can also compensate for potential price volatility.

Short Farming Strategy

If you have a bearish outlook on ETH, you could leverage your position by borrowing additional ETH to open a 3X-short position. You can take the short profit when the price drops within a specific range, while the high returns of leveraged farming can also compensate for potential price volatility.