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lev-stake-sol
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saml33 2024-03-04 11:51:53 +11:00
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components/HowItWorks.tsx
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@ -3,7 +3,9 @@ const HowItWorks = () => {
<div className="mt-6 rounded-lg border-2 border-th-fgd-1 bg-th-bkg-1 p-6">
<h2 className="mb-1">Before you jump in</h2>
<p className="mb-6 leading-relaxed">
Make sure you understand how Boost! works before risking any funds.
Boost! is high risk. Make sure you understand how it works before
risking any funds. Please refer to the <a>Boost! docs</a> for the full
technical details.
</p>
<h3 className="mb-1">The basics of JLP</h3>
<p className="mb-3 leading-relaxed">
@ -17,7 +19,7 @@ const HowItWorks = () => {
all perp trading fees. This is automatically accrued in the price of JLP
over time and is represented as an APR.
</p>
<h3 className="mb-1">The basics of Boost!</h3>
<h3 className="mb-1">The basics of boosting JLP</h3>
<p className="mb-3 leading-relaxed">
Boost! offers a simple way to add leverage to your JLP position. It
works by borrowing USDC against your deposited JLP and then swapping the
@ -31,8 +33,55 @@ const HowItWorks = () => {
yield you make a profit.
</p>
<h3 className="mb-1">Is boosting JLP always profitable?</h3>
<h3 className="mb-1">Fees</h3>
<h3 className="mb-1">Risks</h3>
<p className="mb-3 leading-relaxed">
No. For one, there is a real risk of liquidation. If the price of JLP
drops below your liquidation threshold you will lose some or all of your
JLP.
</p>
<p className="mb-3 leading-relaxed">
There are also fees and costs for borrowing USDC that will affect your
positions profitability.
</p>
<h4 className="mb-1">USDC Borrow Rate</h4>
<p className="mb-3 leading-relaxed">
This variable APR can change significantly and frequently depending on
the ratio or USDC deposits and borrows. It is charged continuosly on the
balance of your USDC borrow and paid to USDC depositors (lenders) on
Boost!.
</p>
<h4 className="mb-1">USDC Loan Origination Fee</h4>
<p className="mb-3 leading-relaxed">
This is a one-time, 50 basis points (0.5%) fee applied to the balance of
your USDC borrow and paid to Mango DAO.
</p>
<h4 className="mb-1">JLP Collateral Fee</h4>
<p className="mb-3 leading-relaxed">
This is charged on your JLP collateral as insurance in case JLP blows up
and can&apos;t be liquidated. It will reduce the size of your JLP
position over time. This fee accrues to Mango DAO.
</p>
<h4 className="mb-1">Position Entry Costs</h4>
<p className="mb-3 leading-relaxed">
When boosting JLP the USDC you borrow gets swapped via Jupiter to more
JLP. This can incur some slippage resulting in an entry price worse than
expected.
</p>
<p className="mb-6 leading-relaxed">
So, for boosting JLP to be profitable the extra yield needs to be
greater than these costs. It can also take some time for your position
to be in profit because of the upfront fees paid to borrow USDC.
</p>
<h3 className="mb-1">Boosting USDC</h3>
<p className="mb-3 leading-relaxed">
Boosting USDC is simply supplying it to the lending pool. Your USDC
balance will lent to JLP boosters and will continously earn the variable
interest rate.
</p>
<p className="mb-3 leading-relaxed">
There are no fees associated with lending USDC but there are risks. If
there was a catastrophic failure in JLP or Boost! you could lose all of
your funds.
</p>
</div>
)
}