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LEND and EARN
This might sound basic to most of you but perhaps not everyone knows that you can go in the Wallet section of your account and click on the LEND button to start earning interests. USD and USDT have usually higher rates but you can lend coins that you decide to hodl for long.
NB to lend, spot margin must be ENABLED, see below how to optimize your strategy by using a sub account.
The image above refers to USDT lending. It can go as high as 25% APR.
You can therefore:
- create a sub account for your cash and carry trade (with spot margin DISABLED)
- keep spare USD on your main account with spot margin ENABLED and lend& earn min 5% APY on your USD balance
- release USD from lending (it takes up to 1hr) and move to cash&carry account if the loss on your short future position approaches 30k USD
Lending on most assets is 0.88% APY unless they are in high demand. Remember this number and read below.
WITHDRAW with SPOT MARGIN ENABLED
First of all, take note of the FTX spot margin enabled or disabled PROs and CONs in the homepage.
If you decide to decide to “Enable Spot Margin Trading” in the PROFILE > MARGIN section of your account you can withdraw most cryptos in your wallet paying just 0.88% APY.
So imagine you lock 100 ETH on your account. You withdraw a portion of it that you deem reasonable and use the ETH to:
- buy a coin that is listed only on another exchange
- yield farm on a FTX sub account you create just for yield farming
You might need a minimum balance or account age before FTX allow margin withdraws. Also, to establish collateral you must have a short/long position open. You can use quarterly Futures as they have the least variance and no interests to pay.
P.S.: This can increase your yield but it is a high risk strategy.
Disclaimer: This is not financial advice. I am not affiliated with FTX. Do your own research and make sure you understand all FTX terms and conditions.