Exercise 9: Yield Optimization Framework

⏰ Time Investment: 60 minutes 🎯 Goal: Build your yield optimization strategy and framework

📚 Required Reading Integration 📖 Primary: Lesson 9: Yield Optimization Strategies 📖 Supporting: Lesson 2: The Mathematics of Lending and Borrowing

💰 Phase 1: True Yield Calculation (20 minutes)

Exercise 1: Calculate true yields

Position: $10,000 USDC supply

Scenario A: Aave on Arbitrum

• Base APY: 5%

• Gas per transaction: $0.50

• Transactions/year: 12

• True yield: _____%

Scenario B: Morpho on Ethereum

• Base APY: 5.5%

• Gas per transaction: $25

• Transactions/year: 12

• True yield: _____%

Which is better? _____ (Why: _________________________________)

True Yield Calculator Template

🔄 Phase 2: Looping Analysis (20 minutes)

Exercise 2: Loop strategy calculation

Setup:

• Asset: JitoSOL (staking yield: 7%)

• Leverage: 3x

• Borrow rate: 5%

Calculate:

• Net yield: (7% × 3) - (5% × 2) = _____%

• Break-even borrow rate: _____%

• Risk level: _____ (High/Medium/Low)

Exercise 3: When would looping become unprofitable?

• If borrow rate exceeds: _____%

• Monitoring needed: [ ] Yes [ ] No

Looping Strategy Analysis

🌐 Phase 3: Cross-Protocol Optimization (20 minutes)

Exercise 4: Rate comparison

Current rates:

• Aave USDC: _____%

• Morpho USDC: _____%

• Spread: _____%

Decision:

• Should you move funds? [ ] Yes [ ] No

• Minimum spread to justify move: _____%

• Gas cost consideration: $_____

Optimization Framework Template

📊 Optimization Framework

Exercise 5: Create your optimization plan

Strategy:

• Target yield: _____%

• Risk tolerance: _____

• Rebalancing frequency: _____

• Minimum spread to act: _____%

✅ Action Plan

• Set up rate monitoring

• Calculate true yields regularly

• Review opportunities weekly

• Rebalance when appropriate

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← Back to Summary | Next: Exercise 10 →