TON on-chain High Yield Opportunities: How to Achieve an 80% Annual Return?

In the decentralized finance (DeFi) space, the TON blockchain is rapidly rising. This article will introduce how to achieve an annual percentage yield (APY) of up to 80% on TON through emerging yield farming strategies.

The Development of the TON Ecosystem

As the TON Foundation invests heavily in supporting liquidity staking pools, the market demand for high-yield strategies continues to rise. Some innovative platforms are launching leveraged yield farms to provide users with high-yield opportunities in the TON DeFi ecosystem.

Main Product Introduction

Leverage Yield Farm

This is a yield enhancement strategy where users provide liquidity to decentralized exchanges and use leverage to amplify returns. For example, if the base yield is annualized at 30%, using 3x leverage, the yield can reach 90% (before deducting interest). Users only need to invest USDT as a single asset, without complex operations, and can automatically receive rewards, saving time and costs associated with manual withdrawals.

Savings Account

Users can earn interest by depositing tokens into a savings account, and these funds will be lent to participants in leveraged yield farms. The higher the demand, the higher the interest rate. This account is suitable for users who want stable returns while maintaining their token balance.

optimized liquidity pool

Some platforms have designed liquidity pools optimized specifically for the exchange of TON, stTON, and tsTON, ensuring that users can enjoy lower slippage during large transactions. Low slippage trading is especially important, as it allows users to effectively reduce costs during frequent asset conversions, thereby enhancing returns. These pools can also dynamically adjust with changes in market demand, ensuring capital liquidity and improving trading efficiency.

Detailed Explanation of Leverage Returns and Strategies

Leverage Yield Farming and Market Neutral Farming Strategies

Leverage yield farming allows investors to borrow additional funds to amplify their yield farming positions. For example:

• No leverage used: Invest $1000, annualized 30%, gain $300 after one year.
• Use 3x leverage: total position of 3000 USD, with the same 30% annualized return, yielding an annual profit of 900 USD.

Leverage strategies can multiply potential returns, but they also come with borrowing costs and liquidation risks.

The market-neutral farming strategy aims to reduce the risks brought by price fluctuations, allowing users to maintain stable returns whether asset prices rise or fall, thereby avoiding directional risks.

Operation example: market neutral farming strategy with 3x leverage

Assuming you hold 1000 USDT, the price of TON is 5 dollars. Using 3x leverage to participate in yield farming, the total position is 3000 dollars.

• 1500 USDT deposited into the liquidity pool.
• Exchange 1500 USD for TON and deposit it into the liquidity pool.

This can reduce the sensitivity of the position to TON price fluctuations, achieving theoretical market neutrality.

Risks and Risk Management

High returns usually come with high risks. When using leverage, special attention is required:

• Liquidation Risk: When the debt ratio exceeds 80%, the system will automatically liquidate the position.
• Impermanent loss: Price changes of assets in a liquidity pool may lead to reduced earnings.

To help users manage risk, some platforms provide health factor monitoring tools that allow users to stay informed about their position status at all times. During periods of significant price volatility, users can choose to close and reopen positions to rebalance the risk of impermanent loss.

Conclusion

The leveraged yield farming strategy on the TON blockchain provides investors with the opportunity to earn high returns. Whether it's leveraged yield farming or savings, there is a trend towards simplifying operational processes, allowing users to focus on enhancing their returns. However, high returns come with high risks, and liquidation risks along with impermanent loss are potential challenges that cannot be ignored. Users are advised to use leverage cautiously, constantly monitor health factors, and timely adjust positions during market fluctuations to effectively manage risks and ensure that investments achieve ideal returns.