Farmers or "investors" on Rodeo borrow funds for leveraged yield farming in protocol strategies.
Users deposit USDC into any of the strategies, and borrow via leverage to increase potential APY earned. Adding leverage is as simple as sliding the leverage bar to the desired amount
Sushiswap ETH/USDC Vault in Alpha Testing
Entering into a Farm (vault) and earning yield is simplified. Users will be able to manage and learn about top vaults from across Arbitrum in a single location, the Rodeo UI
Yield comes from earning in the Farm you have deposited into based on your assets + leveraged assets. This includes real revenue from strategies such as Uniswap, Sushiswap, and GMX trading fees, etc.
There are no time limits for entering or exiting positions. There may be some strategies that depend on external protocol rules and restrictions (ie hedged positions with epoch based options)
Farming on Rodeo gives you a tradable NFT representing your position, similar to LPing on UniswapV3. Each position is a unique combination of borrowed asset + strategy + initial collateral amount + amount borrowed + opening time, and thus needs to be represented as an NFT.
When you open a position, Rodeo builds a wrapping NFT which form the basis of liquidity that is used for lending and borrowing. This is similar to how UniswapV3 has their core protocol pools and the periphery NFT position manager, thus enabling users to trade or use their position in other ways.
The borrow APR is based on a configured "interest rate curve / model" and the current % of utilization of the pool determines where on the curve - ie, what APR - is currently in effect.
The curve is the typical "1. base rate" + "2. a slowly increasing rate" until a certain "kink/point" (of utilization) is reached, then a "3. higher increasing rate" kicks in until 100% utilization to incentivize either more lending or less farming when a pool is over-utilized (so that lenders always have some free tokens to withdraw).
Loan health is calculated by comparing the users' position value with their total borrow value. If this ratio falls below a value of 1, their position can be liquidated.
Note that the liquidation factor must be taken into account. For USDC it looks like: position value * 0.95 / borrow value (including interest)