# Fantom Ponzinomics

By [nixnox.eth](https://paragraph.com/@nixnox) · 2022-04-06

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Let me preface this article by saying that what is written here **does not constitute financial advice**. This strategy is **extremely risky** and could result in significant losses. I’m sharing it to educate you as well as explain my reasoning why high-risk DeFi strategies can have room in a portfolio.

Why a high-risk strategy?
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![Fund performance & risk](https://storage.googleapis.com/papyrus_images/906c7c0488097370a283d9e035b032918815389dbac70b56198365476d9c37d6.png)

Fund performance & risk

The performance, risk and HODL levels of my personal DeFi fund are shown in the graphs above. The **risk level** is determined by how volatile an asset is and expresses a higher degree of risk when the level is rising. The **HODL level** describes the planned length of a strategy, meaning the lower it is, the more short-term strategies are being used in the portfolio.

Over the past 3 months, my **risk level** has been **dropping** consistently. In March, however, the risk level started to increase again, due to the crypto markets recovering, meaning a larger portion of my assets were in volatile assets. I counteracted that by steadily taking profits and keeping the risk level stable. But since I have a **large** **portion** of my portfolio in **stables** (~40%), I wanted to **increase** my **risk**, to allow me to profit from a continued upward movement.

The Setup
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![Strategy chart](https://storage.googleapis.com/papyrus_images/b065c3adc3649afff2a428da07da03aaa9391417ec376e544e0582ba2f65c940.png)

Strategy chart

The strategy is actually pretty simple, based on the Fantom network and is designed to last at most **1-2 months**, depending on market conditions.

Our main exposure is **FTM** and **TSHARE**, the latter being a highly-correlated governance token. The high correlation is great because it does minimise impermanent loss when we supply liquidity on **Spookyswap**. We then stake our spLP tokens on **Tarot Finance** and use **5x leverage**.

We then harvest the **TAROT rewards** every day and stake them into the **TAROT** **vault**, giving us **xTAROT**. If possible we would then also stake the xTarot into vaults. Every week I plan on **selling** all my **xTAROT** into the **Beefy stable pool**. However, rewards that are earned from the xTAROT vaults are kept and **only** **liquidated** at the **end** of the strategy.

The **greatest risk** in this strategy is the underlying token to hold **TSHARE** and it dropping so quickly that it would cause me to be **liquidated**. This is why I want to harvest rewards daily and take profits weekly.

Projected profits, given that the markets stay relatively stable and volume remains high, are roughly **40%** in **30 days**.

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*Originally published on [nixnox.eth](https://paragraph.com/@nixnox/fantom-ponzinomics)*