Covered Leveraged Yield Farming

Teddy Woodward -

We are excited to announce a groundbreaking initiative that brings together Notional, Nexus Mutual, Balancer, and Aura to create a degen’s dream: covered leveraged yield farming for our Aura leveraged vaults. Covered leveraged yield farming offers Arbitrum users a very special opportunity:

  • Leveraged yields from BAL and AURA incentives
  • Double-stacked ARB incentives
  • Full coverage against smart contract risk, oracle failure/manipulation, and severe liquidation failure

That means you get to earn high yields and get showered in token incentives WITHOUT piling on smart contract risk!

Sound too good to be true? Let’s break it down and start with the basics.

What is leveraged yield farming?

Leveraged yield farming is a unique Notional product for advanced users who want to maximize their returns from yield farming with leverage. Notional’s leveraged yield farming vaults deploy funds into Balancer liquidity pools, stake the LP tokens on Aura, and then auto-harvest and reinvest the BAL and AURA incentives to compound returns for depositors.

Pretty straightforward so far - now here’s where the leverage comes into play. When you deposit into one of Notional’s leveraged yield farming vaults, you’re able to borrow up to 7x+ of your deposit from Notional’s lending markets and put that capital to work in the strategy too! Here’s a handy diagram from the Notional docs:

This leverage component gives you the potential for significant upside. If the yield on the vault strategy is higher than the rate you pay to borrow from Notional, you can multiply your total return!

What makes this opportunity special

Leveraged yield farming products are a great tool on their own but the addition of ARB incentives from both Notional and Balancer make this opportunity even better. Wrap it all together with smart contract insurance from Nexus Mutual and you can maximize your yield with confidence that your downside risk is protected.Here’s what each party is bringing to the table to make guarded leveraged yield farming on Notional such a great opportunity:

Balancer: Balancer is incentivizing its liquidity pools on Arbitrum with 50,000 $ARB per week.That means when you use a leveraged yield farming vault, you earn yield from ARB incentives on top of BAL and AURA!

Notional: Extra $ARB incentives on the Balancer pools not enough? Notional’s putting down some ARB on our leveraged yield farming vaults too.Over the next 12 weeks, Notional will give away 175,000 ARB to Notional users via a points program. Leveraged yield farming users will be some of the biggest recipients with 10x point multipliers for the first 2 weeks!

Notional points are like the cherry on top giving you even more ARB on top of the already attractive organic yield on the product.

Nexus Mutual: Nexus Mutual is providing optional smart contract cover for an added cost of ~4.43% APY. With Nexus Mutual's Bundled Protocol Cover, you are fully covered on ALL the smart contract risk of your position. That means if there is a bug on Notional, Balancer, or Aura, you can rest assured that your funds will be safe.

There’s nothing like peace of mind, and the bundled cover product from Nexus Mutual gives that to you. It’s the first smart contract cover product to jointly cover multiple protocols so you can be fully confident that your risk is protected!

Review this resource to learn more about Nexus Mutual's Bundled Protocol Cover.

Eligible pools

This opportunity is limited to leveraged yield farming vaults built on Balancer and Aura, on Arbitrum. Here are the eligible pools:

  • wETH / wstETH
  • ezETH / wstETH
  • rETH / wETH
  • rsETH / wETH
  • wstETH / cbETH / rETH

Summing up

The combined benefits of this partnership are multifaceted:

  • High Returns: Users can achieve high leveraged yields through Notional's leveraged yield farming vaults, enhanced by Balancer's liquidity incentives.
  • Extra ARB incentives: Using Notional’s leveraged yield farming vaults will give you 10x points. Points earned will be convertible to ARB on a monthly basis.
  • Risk Mitigation: Nexus Mutual's bundled coverage ensures that your investments are protected from smart contract risk in each protocol that your funds touch.

How to get involved

Questions? Jump in the Notional Discord. Otherwise, see you on Arbitrum anon!

The Notional Team