# sUSDe LlamaLend market for up to 35x leverage with a special monetary policy

**URL:** <http://gov.curve.finance/t/susde-llamalend-market-for-up-to-35x-leverage-with-a-special-monetary-policy/10132>\
**Category:** Proposals\
**Created:** [June 1, 2024, 1:18pm UTC](http://gov.curve.finance/t/susde-llamalend-market-for-up-to-35x-leverage-with-a-special-monetary-policy/10132 "2024-06-01T13:18:17Z")\
**Posts on this page:** 1\
**Page:** 1

<div class="post-metadata">

**Author:** ![michwill](http://gov.curve.finance/letter_avatar_proxy/v4/letter/m/8e8cbc/32.png) [@michwill](http://gov.curve.finance/u/michwill)\
**Post date:** [June 1, 2024, 1:18pm UTC](http://gov.curve.finance/t/susde-llamalend-market-for-up-to-35x-leverage-with-a-special-monetary-policy/10132/1 "2024-06-01T13:18:17Z")

</div>

**Summary** :

Ethena’s sUSDe vault provides a very interesting currency for farming and speculation. Currently giving around 25% APR, it is also fairly volatile, with fluctuations up to 0.5%-1% (or even more). Liquidity for sUSDe is also very good.

 ![Screenshot 2024-06-01 at 14-52-41 Curve.fi](https://gov.curve.finance/uploads/default/original/2X/3/3df841ebacc45f88bba292b2011fd139fbcb15c5.jpeg)

It would be very advantageous for traders to leverage in the dips (say, at -1% deviation). With x35 leverage, one could win 35% of the initial deposit while earning a **few hundred** % APR.

Below I present a description of how this can be achieved.

**Market parameters** :

Simulator required few modifications to support two different Thalf times: one is for sUSDe/sDAI pool (Thalf = 30 min), and another for sDAI/FRAX (Thalf = 10 min). Data used /frax pool because it historically had a better liquidity and existed for longer, however in reality we would use sUSDe/sDAI + sDAI/crvUSD or even (better) need to create sUSDe/crvUSD.

Results [show](https://github.com/curvefi/llamma-simulator/blob/master/example_susde/results.log) that maximum leverage is achievable at the following parameters:

```auto
fee = 0.2%
A = 200
liq_discount = 1.4% (conservative)
loan_discount = 1.9%

Max leverage = 1 / (1.9% + 0.96%) ~= x35

```

The graph for maximum losses in an hour:

 ![2_A](https://gov.curve.finance/uploads/default/original/2X/3/38a29bade9f76a593f55f7c934f2316022520424.png)

Average losses are much much smaller, on the order of 0.025% per day at max leverage:

 ![3_avg](https://gov.curve.finance/uploads/default/original/2X/b/bb9e22fb3bc0ef98699525566296c26b63b57fd9.png)

**Dynamic monetary policy** :

Monetary policy is pegged to EMA of sUSDe rate: it reaches its value at utilization = 85%, getting lower to 35% that rate at utilization = 0:

 ![Figure_1](https://gov.curve.finance/uploads/default/original/2X/1/1b525cffca5e47ca61595f030371bb3b3531a753.png)

Simulation for this rate curve is presented [here](https://github.com/curvefi/curve-stablecoin/blob/master/model/rate-secondary-susde.py), smart contract can be found [here](https://etherscan.io/address/0xf574cBeBBd549273aF82b42cD0230DE9eA6efEF7).

Comparison of EMA and raw sUSDe rates is on the picture below (we peg rate to EMA):

 ![Figure_1](https://gov.curve.finance/uploads/default/original/2X/7/78c4b1114b6f63c0aec0d8699d3d41c6b5008eb0.png)

**Addrresses:**

- [Price oracle](https://etherscan.io/address/0x38E7627eb98a40e7528BcCe709A80083093Ba2F8#code)
- [Pool for price oracle](https://curve.fi/#/ethereum/pools/factory-stable-ng-169)
- [Monetary policy](https://etherscan.io/address/0xf574cBeBBd549273aF82b42cD0230DE9eA6efEF7#code)
- [Market](https://lend.curve.fi/#/ethereum/markets/one-way-market-11/vault/deposit)