Case Study #1: 716K USD in 2.5 Months from Stability Pool

This Vault earned enough money through the Liquid Loans protocol to afford a house in just two months!

But what’s more shocking is the fact that they could have earned even more. 

Here’s what you need to know.

This article is part of Chain Reactions—DeFi opinions that you can sink your teeth into.

Winning Big With Liquid Loans

So how did this user become one of LL’s biggest success stories so far?

Well, it all started when they took out an interest-free loan using the Liquid Loans protocol, back on December 15th, 2023. 

They collateralized 107 billion PLS, taking out a debt of $3.2 Million USDL on average across this time period.

They then used their USDL to reinvest, by depositing it into the Stability Pool. 

This allowed them to collect rewards in the form of both LOAN token and PLS for the next 62 days. 

Earning $700,000 in just 62 days!

Since this user took out their decentralized loan on December 15th, the total return in the Stability Pool was 22.4%.

This means that, based on the 3.2 Million USDL they minted, they earned roughly 716,888 USD worth of LOAN and PLS from Liquidations. 

To be specific, they earned 12.6 Billion PLS from liquidations.

And this all happened in less than 3 months.

But despite this being an overwhelming success story, they actually could have earned even more by opening a Vault sooner.

How Much Did They Miss Out On?

Liquid Loans launched on the PulseChain mainnet on Dec 1st, which means this Vault missed out on the first two weeks.

At that time, the Stability Pool yielded a whopping 18.8% return. 

Based on this user’s 3.2 million USDL principal, they would have earned roughly 601,600 million USD worth of LOAN token and PLS from liquidations.

This is tons of PLS, which could have been reinvested back into their Vault. It's also tons of LOAN tokens, which could have been staked.

By taking advantage of these strategies and getting in early, they could have even more yield. 

What Can We Learn From This?

Not everyone is going to earn this much from the Liquid Loans protocol, but it’s an inspiring case study nonetheless.

One of the biggest takeaways, of course, is the importance of getting started before everyone else. 

If you’ve been monitoring the returns on the Liquid Loans dApp, you’ve probably noticed that the APR has been decreasing over time.

That’s by design; the larger the pools get, the smaller the yield.

But right now, you can still take advantage of an extremely high APR. 

At the time of writing, the estimated APR is almost 160% for the Stability Pool and over 62% for the Staking Pool.

This means that missing out, even by a few days, can mean leaving a lot of free passive income on the table.

To learn more about earning through DeFi, check out this article: 6 Ways To Make $$$ With Liquid Loans.

Articles in the “Chain Reactions” series are fast-paced DeFi opinion pieces. They do not necessarily reflect the view of LiquidLoans.io, nor is any of the content hosted on this website a substitute for financial advice.