Arbitrum DeFi: How to Earn Up to 30% APR Lending to Leverage Farmers on Archi Finance

Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.

With nearly $574M in liquidity, the GLP token by Arbitrum is a popular index of assets used to provide liquidity for swaps and leverage trading on GMX. Recently in May, a new composable leveraged yield farming protocol launched with a strategy to provide leverage for GLP and boost GLP APY up to 10X. Similar to Gearbox on Ethereum Mainnet, Archi Finance connects users who want passive lending interest with leverage degens. In Archi, passive liquidity providers earn interest by supplying single-asset liquidity and degen farmers borrow those assets to achieve 2X-10X leverage with GLP to achieve a higher APY.

For leverage farmers on Archi, one can choose the collateral assets and leverage allowed by the protocol (up to 10X). The selected borrowing assets will affect the fees for depositing and withdrawing from GMX. 

Archi Finance currently offers two delta hedge strategies. The 50:50 strategy consists of 50% stablecoins and 50% unstable coins (ETH, WBTC), with the existing GLP of GMX fluctuating within this range. Alternatively, you can choose the same proportion of unstable coins as GMX. After borrowing is completed, 10% of the assets will be used as liquidation rewards. Asset protection (liquidation) will be activated when the collateral assets reach 40%, and the remaining assets will be returned to the degen farmer.

When leverage farming on Archi Finance, the assets one deposits become the collateral for external protocols/actions. This includes both initial funds