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Multi-Asset DeFi Strategy

Use multiple collateral types and debt positions simultaneously for optimal capital efficiency.

The Strategy

Combine different assets, both systems (Lending + CDP), and multiple income streams for maximum efficiency.

What you'll use:

  • Multiple collateral types (ETH, BTC, stablecoins)
  • Both Lending and CDP
  • Liquidity provision
  • Rewards optimization

Result: Maximum capital utilization + diversified income

Complete Example: $50k Multi-Asset Position

Your starting capital:

  • 5 ETHST ($15,000)
  • 0.5 WBTCST ($25,000)
  • 10,000 USDST ($10,000)
  • Total: $50,000

Your goal:

  • Utilize all assets efficiently
  • Generate multiple income streams
  • Minimize fees
  • Diversified risk

Expected returns: 8-12% annually

Time needed: 45 minutes to set up
Management: 15 min/week

Step-by-Step Implementation

Phase 1: Supply All Collateral (10 min)

Supply each asset type:

  1. Supply 5 ETHST:

  2. Go to Borrow (sidebar)

  3. In table, find ETHST → Click "Supply"

  4. Enter: 5.0, Click "Supply" (~$0.10 gas)

  5. Supply 0.5 WBTCST:

  6. In table, find WBTCST → Click "Supply"

  7. Enter: 0.5, Click "Supply" (~$0.10 gas)

  8. Supply 10,000 USDST:

  9. In table, find USDST → Click "Supply"

  10. Enter: 10,000, Click "Supply" (~$0.10 gas)

Result: 

✅ Total collateral: $50,000
- ETHST: $15,000 (30%)
- WBTCST: $25,000 (50%)
- USDST: $10,000 (20%)

✅ Can borrow: Up to $37,500 (75% LTV)

Phase 2: Strategic Borrowing (15 min)

Use CDP for bulk position (lower fees):

  1. Mint USDST via CDP:

  2. Go to Advanced (sidebar) → Mint tab

  3. Mint: 18,000 USDST
  4. CR: 278% (conservative)
  5. Stability fee: 2.5%

Use Lending for flexibility:

  1. Borrow via Lending:

  2. Go to Borrow (sidebar) → Borrow section

  3. Amount: 5,000 USDST
  4. Interest: 5%
  5. Total debt now: 23,000 USDST
  6. Health Factor: 1.74

Why split:

  • CDP: Lower fees for long-term
  • Lending: Flexibility for short-term adjustments

Result: 

✅ CDP debt: 18,000 USDST (2.5% fee)
✅ Lending debt: 5,000 USDST (5% fee)
✅ Total debt: 23,000 USDST
✅ Total collateral: $50,000
✅ Combined ratio: 217%
✅ Health Factor: 1.74

Phase 3: Deploy to Income-Generating Activities (20 min)

Strategy A: Liquidity Provision (60% of capital)

  1. USDST-USDST Pool ($12,000):

  2. Provide 6,000 USDST + 6,000 USDST

  3. Expected APR: 10% = $1,200/year

  4. Low risk (stable-stable pair)

  5. ETHST-USDST Pool ($6,000):

  6. Swap 2,000 USDST → 0.67 ETHST

  7. Provide 0.67 ETHST + 2,000 USDST
  8. Expected APR: 15% = $900/year
  9. Moderate risk (IL possible)

Strategy B: Recursive Lending (20% of capital)

  1. Supply borrowed USDST back:

  2. Supply 5,000 USDST to lending

  3. Earn supply APY: 3% = $150/year
  4. Partially offset borrow costs

Strategy C: Hold as Safety Buffer (20%)

  1. Keep 5,000 USDST in wallet:

  2. Emergency fund

  3. Add collateral if needed
  4. Opportunity capital

Result: 

✅ Deployed capital:

- LP (USDST-USDST): $12,000
- LP (ETHST-USDST): $6,000
- Supplied USDST: $5,000
- Safety buffer: $5,000
Total: $28,000 deployed

Your Complete Multi-Asset Position

Assets Summary

Collateral (in vault): 

5 ETHST: $15,000 (30%)
0.5 WBTCST: $25,000 (50%)
10,000 USDST: $10,000 (20%)
Total: $50,000

Debt: 

CDP: 18,000 USDST (2.5% fee)
Lending: 5,000 USDST (5% fee)
Total: 23,000 USDST

Deployed: 

USDST-USDST LP: $12,000 (10% APR)
ETHST-USDST LP: $6,000 (15% APR)
Supplied USDST: $5,000 (3% APR)
Safety buffer: $5,000

Income & Cost Analysis

Annual Income

Source Amount APR Annual Income
USDST-USDST LP fees $12,000 10% $1,200
ETHST-USDST LP fees $6,000 15% $900
Supply APY $5,000 3% $150
Reward Points All activities Est $800
Total Income $3,050

Annual Costs

Cost Amount Rate Annual Cost
CDP stability fee $18,000 2.5% $450
Lending interest $5,000 5% $250
Gas fees Est - $50
Total Costs $750

Net Profit

Annual income: $3,050
Annual costs: $750
Net profit: $2,300

Return on capital: 4.6% on $50k

Plus: Keep exposure to ETHST and WBTCST appreciation!

Risk Assessment

Diversification Score: High ✅

Collateral:

  • 3 different assets
  • Mix of volatile (ETHST, WBTCST) and stable (USDST)
  • Correlation: Partially hedged

Income:

  • 4 different sources
  • Not reliant on single pool
  • Mix of risk levels

Liquidation Risk: Moderate ⚠️

Current metrics:

  • Combined CR: 217% (safe)
  • Health Factor: 1.74 (safe)
  • CDP CR: 278% (very safe)

Safe price drops:

  • ETHST/WBTCST can drop ~20-25%
  • USDST stable
  • Before liquidation risk

Mitigation:

  • Safety buffer ready ($5k)
  • Can add more collateral
  • Can repay debt anytime

Rebalancing Strategy

Quarterly Rebalancing

Check asset weightings:

Target allocation:

  • Volatile assets (ETH+BTC): 60-70%
  • Stablecoins: 30-40%

If ETH/BTC grow to 85%:

  1. Withdraw some volatile collateral
  2. Swap to stablecoins
  3. Add stablecoins as collateral
  4. Rebalance back to 70/30

If ETH/BTC drop to 45%:

  1. Remove some stable collateral
  2. Swap to ETHST/WBTCST
  3. Supply back as collateral
  4. Maintain target allocation

Optimization Techniques

Technique 1: Interest Rate Arbitrage

Monitor rates across systems:

If CDP stability fee drops to 2%:

  1. Mint more via CDP
  2. Repay expensive Lending debt
  3. Save on interest

If Lending rates drop to 3%:

  1. Borrow more from Lending
  2. Burn CDP debt
  3. More flexibility

Potential savings: $50-200/year

Technique 2: Yield Farming Optimization

Switch LP positions based on APRs:

Current: USDST-USDST at 10% APR

If USDST-USDST pool offers 15%:

  1. Remove from USDST-USDST
  2. Swap to USDST-USDST
  3. Provide liquidity there
  4. Extra $600/year

Monitor weekly:

  • Check all pool APRs
  • Factor in swap costs
  • Move if > 3% APR difference

Technique 3: Tax-Loss Harvesting

Use multiple assets for tax efficiency:

Example:

  • ETHST up 50%: Unrealized gain
  • WBTCST down 20%: Can harvest loss

Strategy:

  1. Withdraw WBTCST collateral
  2. Sell for USDST (realize loss)
  3. Buy back WBTCST after 30 days (avoid wash sale)
  4. Offset ETHST gains with WBTCST loss

Consult tax professional

Advanced: Leveraged Multi-Asset

⚠️ Higher risk - experienced users only

Add leverage to multi-asset position:

  1. Current: $50k collateral, $23k debt (46% LTV)
  2. Borrow more: Additional $10k
  3. Swap: To ETHST + WBTCST 4. Supply: As additional collateral
  4. Result: $60k collateral, $33k debt (55% LTV)

Increases:

  • ✅ ETH/BTC exposure
  • ✅ Potential returns
  • ❌ Liquidation risk
  • ❌ Interest costs

Only do if:

  • Bullish on ETH/BTC
  • Can monitor frequently
  • Have emergency funds

Managing Complexity

Weekly Checklist (15 min)

Monday morning routine:

  • [ ] Check Health Factor (keep > 1.3)
  • [ ] Check CDP CR (keep > 200%)
  • [ ] Review ETHST/WBTCST prices vs alerts
  • [ ] Check LP positions (any IL?)
  • [ ] Claim pending rewards
  • [ ] Review pool APRs (any better options?)
  • [ ] Check safety buffer level
  • [ ] Update tracking spreadsheet

Tools:

  • Spreadsheet or portfolio tracker
  • Price alerts (TradingView, etc.)
  • DeFi dashboard (Zapper, DeBank)

Monthly Checklist (30 min)

  • [ ] Detailed P&L calculation
  • [ ] Rebalance if drift > 10%
  • [ ] Optimize debt structure
  • [ ] Harvest rewards and compound
  • [ ] Review and adjust strategy
  • [ ] Update cost basis for taxes
  • [ ] Check for new opportunities

Real Example: David's Multi-Asset Position

Background:

  • $75k portfolio
  • 8 ETHST + 1 WBTCST + $15k USDST
  • Ran for 6 months

His strategy:

  • All assets as collateral
  • $30k minted via CDP
  • $10k borrowed via Lending
  • $40k deployed to various LPs
  • Safety buffer: $10k

Results after 6 months:

Metric Amount
Starting value $75,000
LP fees earned $2,100
Reward Points $800
Interest paid -$600
ETH/BTC appreciation +$8,500
Ending value $85,800
Total gain $10,800 (14.4%)

David's takeaway:

  • "More complex but worth it"
  • "Diversification smoothed volatility"
  • "Multiple income streams felt secure"

Common Pitfalls

❌ Over-Complicating

Problem: Too many positions to track

Fix:

  • Start simple (2-3 pools)
  • Add complexity gradually
  • Use tracking tools

❌ Ignoring Gas Costs

Problem: Frequent rebalancing eats profits

Fix:

  • Rebalance quarterly, not weekly
  • Calculate if savings > gas costs
  • Batch transactions

❌ Chasing Yields

Problem: Moving to every new high-APR pool

Fix:

  • Verify pool legitimacy
  • Check liquidity depth
  • Consider impermanent loss
  • Stick with established pools

When to Use Multi-Asset Strategy

GOOD For ✅

  • Large portfolios ($50k+)
  • Diverse asset holdings
  • Long-term positions
  • Experienced DeFi users
  • Active management tolerance

NOT Ideal For ❌

  • Small portfolios (< $10k)
  • Single asset holders
  • Set-and-forget preference
  • DeFi beginners
  • Low complexity tolerance

Scaling Up

$100k+ Portfolios

Add:

  • More asset types (GOLDST, SILVST, etc.)
  • More LP positions (5-7 pools)
  • Cross-platform strategies
  • Professional tax software
  • Consider DeFi fund/DAO

$500k+ Portfolios

Consider:

  • Institutional platforms (Aave Arc, etc.)
  • OTC desks for large swaps
  • Professional portfolio management
  • Tax and legal advisors
  • Insurance products

Exit Strategy

Partial Exit

If need $20k:

  1. Remove from LPs: $15k
  2. Repay some debt: $10k
  3. Withdraw collateral: $15k worth
  4. Bridge to Ethereum if needed

Keep rest of position active

Complete Exit

See: Withdrawals Guide

Order:

  1. Remove all LP positions
  2. Claim all rewards
  3. Repay Lending debt (higher rate)
  4. Burn CDP debt
  5. Withdraw all collateral
  6. Bridge out if needed

Summary

Multi-asset strategy offers:

  • ✅ Better diversification
  • ✅ Multiple income streams
  • ✅ Optimized fees (CDP + Lending)
  • ✅ Flexibility
  • ❌ More complexity
  • ❌ More active management

Best for: Experienced users with $50k+ portfolios

Next Steps

Learn More

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