Alpaca Academy -I’ve tried a lot of things-

Good morning.😊

Today is a continuation of yesterday.
It’s Monday, but I’m writing this on Sunday, so it’s rich in content!

⇒ Here’s what I wrote last time.

I’ve tried a lot of things.

In the last note, I think you understood softly that you can short in Leveraged Farming. I think you also understood that if you don’t pay attention to the combination of pairs, you will end up with unexpected losses.

Today, I’m going to try a lot of things with concrete numbers until I learn what shorting is all about. Please just look at the parts that interest you.

Italics indicate detailed formulas and explanations. If you’re not good with numbers, you don’t need to read it to get the gist of it.

Conditions:

• ETH-BNB Pool, leverage x3
• The starting rates are
  1ETH = $1,500, 1BNB = $250, BNB/ETH = 0.167
• Input amount $10,000 + borrowed amount $20,000 = total $30,000
• LP will be created in 50:50.
  10ETH : 60BNB = $15,000 : $15,000
  The LP is valued at $30,000.
• To simplify our thinking, we will ignore exchange fees, Farming rewards, and borrowing interest, and only consider the increase and decrease in token price.

The content of this note is based on the Alpaca Finance Yield Farming Calculator created by the official alpaca finance.

1. The price of one of the tokens in the pair goes up or down

1-(1) ETH up

First of all, let’s assume that only the ETH of the ETH-BNB pair goes up, from 1 ETH = $1,500 to $1,666, an increase of about 10%, what would the profit and loss be?