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What is Mole
Mole is a DeFi protocol providing savings, leveraged yield farms and funds.
As for who is the Mole?
Mole is a bunch of adorable tiny moles. They farm in the expansive and gorgeous forest. As time passes, spring goes and autumn arrives. They plant a lot of seeds and then wait for autumn to arrive. They are sitting on the high haystack. The golden wheat field is full of the joy of harvest.
Decentralized Finance (DeFi) is a large forest that supplies investors with decentralized, open, transparent and secure financial protocols.
Mole provides users with safe investment products of different risk levels. It includes three products.
Mole will provide you with a quick introduction.
Savings products provide users with the most stable investment income. Users deposit their token assets to earn two kinds of rewards.
Although savings may not produce the biggest return, they are the most stable and reliable products over time. When the bear market goes down, full of heavy rainstorm, you will love the savings products more and more.
(,,´•ω•)ノ"(´っω•｀。)
The Mole protocol lends the deposited tokens of savings products to the users of the leveraged yield farming by smart contracts. It can help users of the leveraged yield farming to raise leveraged positions, and charge the loan interests from them. These interests are named deposit rewards.
Deposit rewards are very stable. Mole provide a security mechanism robust enough to safeguard users' savings. After the users of leveraged yield farming getting the loan of saving products, they cannot withdraw the loan for other purposes. Instead, the loan should be allocated inside the Mole smart contracts for the purpose of raising leveraged positions.
In addition, the Mole protocol has a powerful liquidation function. It can ensure high-level security.
The deposit rewards are compound interest. Mole believes in long-term value investment and the power of compound interest.
Mole leveraged yield farming is prepared to provide you a dragon slayer in order to protect you from the carnage that is now taking place in the world of investments.
Mole leveraged yield farming is aimed to make the most use of loan borrowed from savings products. The loan is used as a lever to magnify the impact of users' own yield farming investment. The goal is to earn a higher rate of return while simultaneously paying a certain amount of borrowing interests on the loan.
Leveraging is risky. However, users are able to avoid investment risks with well-designed strategies. Users can receive larger returns while taking a lower risk with good strategies.
Mole will explain it for you in the following chapters.
The returns of leveraged yield farming is divided into the following categories. While assisting you in harvesting these rewards automatically, Mole also assists you in automating the investing of those rewards, which results in the rewards to be compound.
Mole leveraged yield farming will take user's own tokens as collateral, and take the borrowed loan from the savings products as leveraged funds. Then it turns these tokens (collateral + leveraged funds) in form of trading liquidity provider tokens (LP Tokens) required by the distributed exchange(DEX).
DEX will reward the providers who provide LP tokens. The rewards given out by Dex serve as the yield farm rewards. For example, in the Dex TraderJoe, it provides Joe tokens as rewards for liquidity providers.
Some liquidity pools of DEX will provide rewards to users with more than one kind of token, it may be two kinds of tokens. Mole leveraged yield farming will claim the dual tokens rewards and reinvest them to help users to get compound returns automatically.
They are such a hardworking, brave, caring and lovely group of little moles, digging around for the rewards on your investments and delivering them back to you.
When the diligent little Mole places the user's investment on DEX to become a liquidity market maker and obtains the yield farm reward, it can also get trading fee rewards given out by DEX at the same time. The larger the volume of trading in the pool, the more trading fee rewards will be returned to the users.
Well, users need to pay the borrowing interests for the loan borrowed from the savings products pool. The borrowing interests will become one of the income sources of the savings pools for other users who lend to you.
If the total of the rewards is more than the interests paid on the borrowed tokens, then using leverage will continue to be financially beneficial.
The industrious and brave Mole can always find suitable weapons from the Arsenal when facing various crises lurking in the forest, face them bravely and calmly, and save the day. Just like the investment market, there are hurricane like storms and also colorful aftershocks.
Mole's slogan is: "Hoe is wielded well. All farm can grow up."
The following strategies can be used in Mole leveraged yield farming:
Because the users' investment tokens serve as liquidity provider for the Dex in Mole leveraged yield farming, the price of LP will fluctuate with the market volatility of the two paired tokens. It is caused by the influence of the AMM market making mechanism. The price of LP moves in tandem with the price movement of the two paired tokens.
If you want to avoid too much uncertainty and market volatility, you just want to collect stable and reliable returns. Then, the Dual Stable Tokens Strategy is a good choice. You can use two stable tokens to make LP pair. In this way, no matter how the token price fluctuates, you will be able to get stable and solid return with leveraged yiled rate.
Mole provides you with the bond fund. It uses dual stable tokens pair and makes improvements: Mole uses intelligent algorithms to automatically select the best loan currency and leverage for users, so as to maximize income. Please refer to:
This strategy is commonly used in other DeFi protocols. It is not leveraged, thus it doesn't need to pay borrowing interests. There will be compound interest on your earnings since Mole will automatically reinvest them for you.
In Mole leveraged yield farming, besides acquiring rich farming rewards, you can also get the investment return gained from the market volatility of LP tokens. In a bull market, it is a good way to choose a token of which the price you believe will go up, open farming position to do LONG operation. You can amplify your investment return by leverage.
High leverage naturally means bigger risk. When the direction of the market volatility is the same as the direction in which your investment is going, the leverage will result in more profits. But it will also bring more losses when investing in the wrong direction. You should keep avoid risk and invest within the scope of risk tolerance.
In case the value of LP falling down due to market volatility, you can still obtain the Mole leveraged yield farming rewards. It can make up the market volatility loss.
If you predict that it is a bear market, the token price will probably fall down. Then you can open a farming position to do SHORT operation to take advantage of the market volatility. You will be able to obtain not only rich farming rewards, but also the income brought by the decline in token price.
Mole warns you to keep the risk under control because higher leverage can bring not only significant farming rewards, but also more price fluctuation.
You may want to know, is there a strategy that can be used in both bull and bear markets without being adversely affected by market volatility? Is there a technique that can protect against the market volatility, at the same time making profit from the yield farming rewards with high leverage?
The answer is yes. As following two methods:
a) Balanced strategy - Single position
b) Hedge strategy - Dual positions
The main principles of these two methods are as following:
Open one or two positions. Make the two paired LP tokens to be one is unstable token and the other one is stable token. Let the exposure of unstable token be the same amount for LONG and SHORT positions respectively. By doing this, the net exposure of unstable token will down to zero. The zero net exposure of unstable token can avoid market volatility. At the same time, you can earn rich yield farming rewards with high leverage.
The proportion of two paired tokens of LP will changes accompanying tokens price changes. It has to be rebalanced to keep the LONG and SHORT exposures the same amount, so that the net exposures can be zero to avoid market volatility.
You can do the rebalance manually by adjusting the proportion. Fortunately, Mole can do the rebalance automaticly by these two products: balanced funds and hedge funds.
a) Balanced strategy - Single position
b) Hedge strategy - Dual positions
If you want to enjoy not only the yield farming rewards, but also the long-term value return that came from the cryptocurrency price going up. You can use 1x LONG exposure strategy.
Given that this strategy has an exposure of 1x unstable token, it will be impacted by the unstable token price. It is recommended to be used in mainstream cryptocurrencies such as BTC and ETH for long-term investment.
There are two kinds of 1x LONG exposure strategy methods:
a) 1x LONG exposure strategy - Single position
b) 1x LONG exposure strategy - Dual positions
Here is the brief introduction of these two methods:
Open one or two farming positions, Make the two paired LP tokens to be one is unstable token, the other is stable token. Let the net exposure of these positions to be 1x unstable token.
Refer to following details:
a) 1x LONG exposure strategy - Single position
b) 1x LONG exposure strategy - Dual positions
Mole also provides automatic rebalance in trend funds and index funds instead of manual, so that the net exposure remains 1x LONG.
In Mole leveraged yield farming, if the fluctuation of token price exceeds the liquidation threshold, the leveraged yield farm positions will be liquidated in time. It is a safeguard for the users of savings products. In fact, the liquidation is also a protection for users of leveraged yield farming. It help to prevent the value of the position from falling further in the face of severe market volatility.
In conclusion, Mole leveraged yield farm provides you with a wide variety of weapon suitable for different market conditions, so that you have enough financial tools to explore the dark forest, get out of the gloom, and enjoy the sunshine forest. Amazing~
Mole currently offers 3 types of 5 funds:
a) Type 1 : Robust stable, dual stable tokens
It contains Bond Fund. It has following advantages:
- Extremely stable investing returns by using dual stable tokens
- Mole intelligent algorithm will automaticly calculate the best leveraged rate and borrowing interests to maximize investing returns
- There is no risk of being liquidated
- Profit and loss is based on fiat currency standard
b) Type 2 : Neutralize market volatility risk:
It contains Balanced Funds and Hedge Funds. They have following advantages:
- Neutralize market volatility to earn high and stable invest returns
- Automatic positions adjustment, users only need one click to purchase, Mole automatically helps to complete all the background operations
- There is no risk of being liquidated
- Automatic compound interest
- Profit and loss is based on fiat currency standard
c) Type 3 : 1x exposure, following mainstream token price fluctuations:
It contains Trend Funds and Index Funds. They have following advantages:
- Track price fluctuation of corresponding cryptocurrency, and enjoy not only the long-term value growth of price goes up, but also rich farming rewards.
- Automatic positions adjustment, users only need one click to purchase, Mole automatically helps to complete all the background operations
- There is no risk of being liquidated
- Profit and loss is based on cryptocurrency (such as ETH, BTC) standard
Mole funds make all of the related operations automatic. The industrious and brave little Mole silently endures all the ascetic life of adjusting positions accompanying to the market volatility. It brings you high yield farming income. More important, these funds will not have the risk of liquidation. Amazing world!
Bond Fund is constructed based on the dual stable tokens trading pair in the leveraged yield farming, which has extremely high robustness.
Bond Fund Tech. Details:
Mole Bond Fund automatically adjusts the optimal leverage and borrowing token by intelligent algorithms to maximize investing revenue. Revenue is affected by the following factors:
Income items:
- Yield farm rewards
- Transaction fee rewards
Paid items:
- Borrowing Interest
Mole calculates the leverage ratio and borrowing token to maximize the profit.
In addition, Mole Bond Fund sets up a profit threshold and time threshold to prevent from frequently adjusting positions and avoid high position adjustment losses.
Balanced Fund uses the strategy 'Balanced strategy - Single position' that was described earlier.
When you buy balanced fund product, Mole will open one position in leveraged yield farming for you. For example:
Use $100 token as principle collateral, open ETH-USDC position, and borrow ETH with 2x leverage. At this time, your debt is $100 ETH (2x -1x principal =1x)
- Principle: $100
- Debt: $100 ETH (debt is equivalent to SHORT operation. $100 ETH debt means shorting $100 ETH)
- Position: $200 (Holding $100 ETH + $100 USDC for the two paired LP tokens, According to Dex AMM rules, these two paired LP tokens ETH:USDC should be 1:1. Holding position is equivalent to LONG operation)
Summary of exposure:
The holding position of $100 ETH is equal to debt $100 ETH. Holding position is LONG operation, and debt is SHORT operation, so that the net exposure of ETH is 0, and you also holding $100 USDC.
So, the total net exposure is $100 USDC + $0 ETH, which means the market volatility is almost be 0 because the net exposure of ETH is almost 0 and USDC is stable. You can enjoy the stable yield farming incomes without market volatility.
Hedge funds are based on the strategy 'Hedge strategy - Dual positions' described earlier.
The essence of Mole hedge fund is to hedge the LONG and SHORT exposures of two positions, so that the net exposure of fluctuations are zero. For example:
1) Position 1:
Use $100 token as principle collateral, open ETH-USDC position, and borrow USDC with 3x leverage. At this time, your debt is $200 USDC (3x -1x principal =2x)
- Principle : $100
- Debt: $200 USDC (debt is equivalent to SHORT operation. $200 USDC debt means shorting $200 USDC)
- Position: $300 (holding $150 ETH + $150 USDC. According to Dex AMM rules, these two tokens ETH:USDC should be 1:1. Holding position is equivalent to LONG operation)
Summary of exposure:
holding positions offset shorting debt, Your exposure of position 1 is as following:
LONG $150 ETH + SHORT $50 USDC
2) Position 2:
Open the other ETH-USDC position to hedge the ETH exposure of the first position. Since USDC is a stable token, it does not need to pay much attention to its fluctuation, because its price is approximately anchored at $1.
The second position uses $300 as the principle collateral to open a 3x leveraged position, that is, borrow $600 ETH as the debt.
- Principle: $300
- Debt: $600 ETH (that is $600 ETH SHORT)
- Position: $900 (that is $450 ETH + $450 USDC holding LONG)
Summary of exposure:
holding positions offset shorting debt. Your exposure of position 2 is as following:
SHORT $150 ETH + LONG $450 USDC
3) Position 1 + Position 2:
A magic happened. The net exposure of the first position and the second position was neutralized. LONG position of $150 ETH offset the SHORT position of $150 ETH, so the net exposure of ETH was 0. Similarly, also it has LONG position of $400 USDC. Since USDC is a stable token with stable value, its fluctuation can be ignored. The key ETH fluctuates has been hedged since the net exposure of ETH is 0 with these two positions.
Through the precise operations of these two positions, you can not only hedge the risk of market volatility, but also obtain high yield farming income at leveraged rate. Awesome!
Trend funds are based on the strategy '1x LONG exposure strategy - Single position' described earlier.
Trend fund will open one position, and make the net exposure to be 1x LONG position. For example:
Use $100 token as principle collateral, open ETH-USDC position, and borrow USDC with 2x leverage. At this time, your debt is $100 USDC (2x -1x principal =1x)
- Principle: $100
- Debt: $100 USDC
- Position: $200 (that is $100 ETH + $100 USDC holding LONG)
Summary of exposure:
Holding positions offset shorting debt. Your net exposure is:
- Net exposure: $100 ETH
You will find that the trend fund value will change accompanying ETH price changes by the same amount as your principle amount ($100). And you will get yield farming rewards at the same time with a leveraged rate ($200 position).
Index funds are based on the strategy '1x LONG exposure strategy - Dual positions' described earlier.
The essence of Mole index fund is to aggregate exposures of two farming positions, so that the net exposure is 1x LONG cryptocurrency. For example:
1) Position 1:
Use $100 token as principle collateral, open ETH-USDC position, and borrow ETH with 3x leverage. At this time, your debt is $200 ETH (3x -1x principal =2x)
- Principle: $100
- Debt: $200 ETH (debt is equivalent to SHORT operation. $200 ETH debt means shorting $200 ETH)
- Position: $300 (holding $150 ETH + $150 USDC. According to Dex AMM rules, these two tokens ETH:USDC should be 1:1. Holding position is equivalent to LONG operation)
Summary of exposure:
Holding positions offset shorting debt, Your position 1 is as following:
SHORT $50 ETH + LONG $150 USDC.
2) Position 2:
Open the other ETH-USDC position.
The second position uses $300 as the principle collateral to open a 3x leveraged position, that is, borrow $600 USDC as the debt.
- Principle: $300
- Debt: $600 USDC (that is $600 USDC SHORT)
- Position: $900 (that is $450 ETH + $450 USDC holding LONG)
Summary of exposure:
Holding positions offset shorting debt. Your position 2 is as following:
LONG $450 ETH + SHORT $150 USDC
3) Position 1 + Position 2:
The net exposure is: LONG $400 ETH. It is just the same as the initial principle $400.
With index fund, you can earn not only the long-term value growth of cryptocurrency when token price goes up, but also rich farming rewards.
Cryptocurrency price goes up and down with market volatility. Mole will help you rebalance the two positions so that they can stay in 1x LONG exposure.
If you are confident in mainstream cryptocurrency, and firmly believe the price of top cryptocurrency will rise in the future, then trend fund and index fund are good choices for you. It not only brings returns from the rise of price, but also provides yield farming rewards.
If you are not optimistic about the future of mainstream cryptocurrency, please be careful with trend fund and index fund, because they will be impacted when the cryptocurrency price goes down.
Trend fund and index fund are much better than simply hold the cryptocurrency, because they have extra yield farming rewards, which will compensate the loss in case of price going down.
Mole has not released tokens at present, and will release in the future based on market conditions. According to the activity of community users and the use of Mole products, it will comprehensively balance various factors, which is an algorithm conducive to motivating users.
Last modified 20d ago