What is Looping?

Looping involves repeatedly borrowing and re-depositing the same asset to increase your overall exposure and potentially earn higher yields. In traditional looping, converting the borrowed asset back to the original asset (through DEXs) can incur fees and introduce price fluctuation risks.

Why is Nazca Ideal for Looping?

Nazca excels in looping strategies due to its unique design:

1. 0 Borrow Interest Design: Nazca utilizes Blast native yield to subsidize borrowers when utilization rate is low, leading to 0 borrowing rates. This eliminates the typical concern in looping (borrowing costs exceeding lending APY), maximizing your profit potential.

2. Simplified Looping: You can loop a single asset without needing swaps, avoiding additional fees and price fluctuations.

Nazca’s innovative features create an ideal environment for looping with minimal risk and potentially high returns.

Step-by-Step Looping Tutorial:

Prerequisites:

• Deposit your asset: Start by depositing your desired amount of the chosen asset (e.g., ETH, USDB) as collateral in the selected pool.

Looping Steps:

1. Borrow the same asset: Utilize the “Safe Max” option to borrow the maximum amount of the same asset allowed based on your collateral.

2. Re-deposit the borrowed asset: Directly re-deposit the borrowed asset back into the same pool as collateral.

3. Repeat: Repeat steps 1 and 2 as many times as desired, considering gas fees and potential diminishing returns.

Example:

Assuming you start with 1000 USDB:

• Loop 1: Deposit 1000 USDB, borrow 719 USDB, and re-deposit it for a total of 1719 USDB in collateral.

• Loop 2: Borrow another 521 USDB and re-deposit, bringing your total collateral to 2240 USDB.

Result:

Now you’re effectively earning

Benefits:

• Increased exposure: Amplify your holdings without liquidation risk, maximizing potential yield from the lending APY.

• Zero Borrowing Cost: Eliminates the risk of borrowing costs exceeding lending APY, a common challenge in traditional looping.

• Simpler and cheaper: No need for swaps between different assets, avoiding additional fees and price fluctuations.

Risks:

• Incentive period ending: Looping becomes unprofitable once the pool’s incentive period concludes and the borrowing rate rises above the lending APY.

• Stablecoin fluctuations: While using stablecoins reduces price fluctuation risk, the strategy hinges on the chosen stablecoin’s stability.

• Smart contract risks: As with any DeFi platform, inherent risks associated with smart contracts exist. Conduct thorough research before participating.

Conclusion:

Looping on Nazca offers a unique opportunity for experienced DeFi users to maximize returns with minimal risk. By leveraging 0% borrowing and incentivized pools, you can amplify your exposure and potentially earn significant yields on a single asset. However, always conduct your own research (DYOR) and understand the associated risks before employing this strategy.

About Nazca

Nazca redefines DeFi on Blast as the ultimate money market, offering the first-ever zero-interest borrowing and a unique Adaptive Equilibrium Interest Rate Model. This innovative platform sets a new standard, empowering both liquidity suppliers and borrowers with unparalleled efficiency.

Team: Nazca team is composed of 11 crypto enthusiasts and seasoned entrepreneurs. Our collective experience spans renowned DeFi projects on Avalanche, NEAR Aurora, and zkSync, with each project reaching over $20M in TVL at peak performance.

Website | Testnet | Twitter | Discord | Docs |

Embark on an unprecedented DeFi adventure with the Nazca x Galxe Blast Takeover! Dive into the world of Nazca’s cutting-edge interest rate algorithms and seize the opportunity to earn exclusive NFT rewards. Plus, participate in our $5,000 Bug Bounty program and contribute to building a more secure & seamless DeFi ecosystem.

Why Nazca is a Game-Changer

Nazca’s testnet is a beacon for every DeFi enthusiast and yield farming adventurer, offering an unparalleled lending experience. As we gear up for our mainnet launch, our commitment to your security is paramount, with contracts meticulously audited by leading security firms.

At the heart of Nazca is the revolutionary Adaptive Equilibrium Interest Rate Model (AEIRM), setting new benchmarks for DeFi efficiency and solvency. Tailored for the Blast ecosystem, Nazca is the epitome of capital efficiency and maximized yields, all within a decentralized, non-custodial, and algorithmic framework.

Dive into the ETH and USDB Pools

The journey begins with our ETH and USDB pools, where guaranteed supply yields and the freedom of 0-interest borrowing await. This is your introduction to a world where your assets are not just stored, but actively working for you.

🕵️‍♂️ Join the Hunt: A $5,000 Bug Bounty Awaits

Our pursuit of perfection is relentless, and your sharp eyes are our greatest allies. We challenge you to find even the smallest glitches and help us perfect our platform.

Bug Bounty Details:

• Prize Pool: $5,000 in USDT, earmarked for our most observant participants.

• Reward: Earn $25 for each approved bug report, with rewards for up to 200 insightful contributions.

• Event ends: Feb 29, 2024, 23:59 GMT

• Rules: Detect any bug, from APR display errors to typos, and report it with constructive feedback in our Nazca Discord channel #bug-report. The first report of a unique bug claims the bounty.

About Nazca

Nazca redefines DeFi on Blast as the ultimate money market, offering the first-ever zero-interest borrowing and a unique Adaptive Equilibrium Interest Rate Model. This innovative platform sets a new standard, empowering both liquidity suppliers and borrowers with unparalleled efficiency.

Team: Nazca team is composed of 11 crypto enthusiasts and seasoned entrepreneurs. Our collective experience spans renowned DeFi projects on Avalanche, NEAR Aurora, and zkSync, with each project reaching over $20M in TVL at peak performance.

Website | Testnet | Twitter | Discord | Docs |

At the heart of Nazca.money is our pioneering, decentralized, non-custodial, algorithmic money market protocol, crafted atop Blast’s Layer 2 technology. With the integration of Blast’s native yield mechanisms, we proudly unveil the “Adaptive Equilibrium Interest Rate Model” (AEIRM). This innovative model guarantees a market that balances efficiency and solvency, a testament to the power of Blast’s native yield mechanisms.

Addressing DeFi’s core challenges

The landscape of lending platforms is riddled with inefficiencies — some suffer from poor capital utilization, affecting lender returns, while others face risks of overutilization, threatening liquidity and solvency. Nazca.money tackles these challenges head-on. Through AEIRM, we dynamically optimize yields, fostering a symbiotic relationship between borrowers and suppliers.

Nazca + Blast = 💥

Utilizing Blast’s state-of-the-art blockchain and Ethereum Layer 2 solutions, Nazca.money introduces a rebase mechanism to recalibrate demand and supply curves continuously. Our approach not only ensures financial stability but also heralds an era of zero-interest borrowing and assured returns for suppliers, targeting a utilization rate of 40%-80% for unparalleled efficiency.

“Everything lives by movement, everything is maintained by equilibrium, and harmony results from the analogy of contraries; this law is the form of forms.”

-Eliphas Levi

AEIRM in a Glance

The essence of Nazca’s philosophy, all lies in equilibrium…

Arbitrage Zone

In the Arbitrage Zone, the borrower’s interest rate is strategically set lower than the supply rate, or even at 0%, as a direct result of compensation from Blast native yield. The design of this zone encourages arbitrageurs to engage in a borrowing-and-supplying loop, leveraging the low borrowing costs to earn higher returns.

Equilibrium Zone (The Expected Norm)

This zone is where the market is expected to stabilize by design. It represents a balanced state of supply and borrow demands, with a gradual rise in interest rates for both parties. Once the arbitrage opportunities diminish, the market enters the Equilibrium Zone. In this phase, there’s a balance between supply and borrow demand. This zone represents a stable market state where the incentives for arbitrage are reduced, and the market is primarily driven by genuine supply and borrow dynamics. Nazca’s goal is to maintain this zone as the standard operating condition, ensuring steady yields and a healthy, sustainable market environment.

Jump Zone

In scenarios where market solvency is at risk (due to high utilization), the protocol shifts its strategy. In the Jump Zone, all native yield generated is directed towards suppliers, with none allocated to borrowers. This shift is designed to quickly recalibrate the market by encouraging new supplies and curbing excessive borrowing. This zone acts as a critical safety measure, ensuring the protocol’s stability and solvency during market stress conditions.

Security at the forefront

Grounded in the audited and battle-tested framework of Compound V2, our platform prioritizes security. Ahead of our launch, we’ve scheduled a comprehensive audit with a renowned security firm to ensure the utmost safety for our users.

What’s next?

The path ahead is filled with milestones: Testnet Campaign, Reward Program, Mainnet Launch, ve8020 Tokenomics, and the Blast Hub. We are dedicated to bringing exciting features to our community and users in the lead-up to our launch. Join our community and be part of this transformative movement.

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About Nazca

Nazca, a decentralized money market on Blast L2, harnesses a novel interest rate model (Adaptive Equilibrium Interest Rate Model) leveraging Blast's native yield for optimal supply and borrow equilibrium.

Team: Nazca team is composed of 11 crypto enthusiasts and seasoned entrepreneurs. Our collective experience spans renowned DeFi projects on Avalanche, NEAR Aurora, and zkSync, with each project reaching over $20M in TVL at peak performance.

Website | Twitter | Discord