A PulseChain (PLS) Accumulation Strategy Using Liquid Loans

The Liquid Loans protocol is an amazing tool for PulseChain maximalists. 

By borrowing USDL and selling it to buy more PLS, users can leverage their holdings, responsibly.

This strategy has the benefit of increased price exposure to PLS and an expedited accumulation of PLS coin count.

Here’s exactly how to harness the “PLS Accumulation Strategy”:

Strategy Overview

• Mint 2,000 USDL using 20,000 USD worth of PLS
• Sell 2,000 USDL for PLS and deposit it into your vault
• You now have 22,000 USD worth of PLS (thus increasing your price exposure)
• Vault appreciates 10% to 24,200 USD worth of PLS, then mint another 420 USDL.
• Sell that 420 USDL for PLS and deposit it back into your vault.
• You now have 24,620 USD worth of PLS.
• Repeat this strategy indefinitely. 

Step-By-Step

1. Open Your Vault with a Collateral Ratio of 1000%

NOTE: You can use whatever collateral ratio you would like. However, a 1000% collateral ratio provides enough of a buffer from both liquidation and redemption to survive most market downturns.

2. Sell the USDL for PLS and place it back into your vault. 

3. If the price of PLS appreciates 10%, then mint enough USDL to bring your collateral ratio back to 1000%. 

NOTE: You can mint more USDL at any price appreciation interval, it does not need to be every 10% rise.

4. Repeat this strategy indefintely. 

Comparison

Let’s say you took a LOAN of 2,000 USDL on 20,000 USD worth of PLS and the price of PLS went up 30%.

Without taking any action, you are left with 26,000 USD worth of PLS and 2,000 USDL worth of debt.

Now, let’s compare this to using the PLS accumulation strategy. Everytime the price of PLS goes up 10%, you mint more USDL and convert it to collateralized PLS.

Your position is now 30,088 USD worth of PLS with a debt of 2735 USDL. 

This is 4,088 more USD worth of PLS than you would have without employing this strategy (a return of over 50% compared to just a 30% return).