Going to answer my own question here in a 🧵 The idea is to generate between $150k-$250k in income per year with no large drawdowns (let's define as > 15% or $75k) with a $500k crypto nest egg. That's between $410 (8 bps) and $685 (14 bps) per day. Sustainably. 👇
You have $500k Goal is to earn 30-50% a year, reliably, while mitigating the risk of a large drawdown. How do you do it?
2/6 To do this with size sustainably, a key is to make sure all of your money is working for you, even if some isn't earning 30%. To that point, I'm tracking down the highest USDC-deposit yields I can find on platforms with low(ish) protocol risk. Even still, I'm limiting those to 15% per protocol and 45% in the aggregate. I'm trying to find protocols that at least appear to have some support from the respective chain. Let's assume we get 18% on these. @YeiFinance is the first that comes to mind. Yield is 13.1%, but you can loop the supply/borrow arbitrage to pick up the additional 5% I'll pick up as much sweat equity as I can by rotating these funds to whatever site has the best promo APR. Total: $225k Deployed $111.94 Income/day
3/6 I'm going to want some exposure to ETH and SOL. I'm going to do like a @jito_sol (7.9%) and @LidoFinance (3.5%). I'm not going to assume any appreciation on the ETH or SOL. Total: $225k Deployed $30.62 Income/Day
4/6 That leaves between $272.47 and $546.44 per day and only $50k to do it with. You're not going to get there without an active strategy. For that, I'm headed to @MeteoraAG. I'm providing liquidity on multiple tokens. I'm shooting for AT LEAST 2%/day in fees ($1k) on average, which gives me room for rebalancing and such. Coins like $LAUNCHCOIN have been reliable in providing at least that, but I'm still diversifying this across multiple tokens and making the size of my pools based on risk.
5/6 Bankroll management. You're going to have good days and bad days. Outside of safety, here are my priorities Priority #1 - Pay Yourself If I'm trying to pay myself by withdrawing at least $150k/year, I'm pulling as much as $1k/day off the table on good days. It stays off the table. Priority #2 - Active Bankroll I'm trying to keep at least $50k in my LP bucket. Priority #3 - Balance I'm trying to keep the distribution of USDC/SOL/ETH approximately static at 50% USDC, 33% ETH, 17% SOL. I'll rebalance that as SOL and ETH depreciation/appreciate, or if, god forbid, I lose one of the protocols. I'm not compounding the USDC protocols. I'm taking that distribution.
6/6 I'll be very cautious with my 'trades'. If I find something that screams alpha, I'll take funds from the LP account to execute. Okay. I went first. Now it's your turn.
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