From Binance to Aave to DinoSwap
How to yield farm on DinoSwap using borrowed USDC from Aave
With this post I want to show my end to end process from getting my money from an exchange (Binance) to a farm (DinoSwap) using borrowed money from a lending protocol (Aave).
This post is primarily targeted towards beginners but can also act as a validation for more experienced farmers.
Table of contents
- Getting WBTC on Binance
- Moving WBTC to your MetaMask wallet
- Bridge WBTC from Ethereum to Polygon
- Deposit WBTC to Aave
- Borrow USDC
- Add liquidity to DinoSwap
- Final Thoughts
Prerequisites
- Binance account (or other exchange that sells WBTC)
- MetaMask wallet with Polygon configured (https://docs.matic.network/docs/develop/metamask/hello and https://docs.matic.network/docs/develop/metamask/config-polygon-on-metamask)
1. Getting WBTC on Binance
Wrapped Bitcoin (WBTC) is the first ERC20 token backed 1:1 with Bitcoin. We need Wrapped Bitcoin because you cannot transfer regular Bitcoin to the Ethereum network. We use the Ethereum network because Aave is built on it. We are going to use WBTC as collateral in Aave so we can borrow USDC.
To demonstrate I will buy 0.5 WBTC for the price of 0.5 BTC on Binance.
You will not get exactly 0.5 WBTC because you payed a fee when buying WBTC.
2. Moving WBTC to your MetaMask wallet
Once your withdrawal has been completed your WBTC should show up in your MetaMask.
3. Bridge WBTC from Ethereum to Polygon
Time to move our WBTC to the Polygon network so that we can avoid large Ethereum gas fees.
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Go to https://wallet.matic.network/bridge/ and select your WBTC tokens. Click on transfer and follow the rest of the procedure. It’s self explanatory but I’ll add screenshots of the process for your convenience.
Congratulations you should now see that your WBTC is on the Polygon network:
4. Deposit WBTC to Aave
Now it’s time to deposit our Wrapped Bitcoin on Aave so that we can use it as collateral. Go to https://app.aave.com/ and click on the Aave Polygon market.
Then click on “Deposit” in the WBTC row.
Here you can choose how much you want to deposit.
Click on “Continue” and approve the necessary transactions. I added screenshots of the process for clarity.
If all went well you should see your WBTC on the dashboard.
5. Borrow USDC
We’re almost there… Finally we can borrow USDC using our WBTC as collateral. Click on “Borrow now” and select the amount of USDC that you want to borrow.
I’ve chosen to only borrow 4 000 USDC so that I have a very good “Health Factor”. The more you borrow, the more you risk to be liquidated.
Click on “Continue” and complete all the necessary transactions using MetaMask. If all went well you should see your loan in the dashboard.
Click in the top right on “Details” to see at what price you could get liquidated.
In my case my collateral would have to drop ~46 % in value. That’s in my opinion very unlikely to happen overnight so I feel comfortable with this loan. If I see a sudden drop in Bitcoin’s price then I still have the time to pay back my loan before I get liquidated.
6. Add liquidity to DinoSwap
We arrive at the final step, almost ready for those sweet Dino gains.
First we’ll swap half of our borrowed USDC to DINO using SushiSwap. Click on “Swap” and confirm the necessary transactions. I won’t be adding all the screenshots anymore, I think you get the gist by now.
Now that we have USDC and DINO we can get a USDC-DINO liquidity position. Click here to get DINO-USDC LP. Add the maximum amount of USDC, the DINO amount will be filled automatically.
With your pool tokens in your wallet you are now able to stake! Go to https://dinoswap.exchange/farms?t=l, click on the DINO-USDC pool and then on the plus sign on the right.
As you can see my DINO-USDC pool value is 6 527 dollars. That is because I already had a share of the pool before I made this guide. For you it should show a value around 4000 dollars.
7. Final Thoughts
Do not risk more than you can lose. DinoSwap is a farm backed by VC’s and rated by RugDoc.io as low risk so it is considered a relatively safe farm but when VC’s decide to sell then the price of DINO will probably dump.
For now I personally think DinoSwap still has some runway because they are still adding new features and the VC’s are incentived to hold. You can find the roadmap on their website and Twitter (https://twitter.com/DinoSwapHQ). On my Twitter I post most of my moves including when I pull out of DinoSwap.
I hope this guide can help somebody in some way. If you have questions or feedback be sure to comment or contact me on Twitter (@Willy_Yield).
