Uni v2 farm

In the zkSync era, there are currently many decentralized exchanges (DEXs) built on the principles of Uniswap V2, such as Mute, SpaceFi, and others. Users can earn transaction fees and platform token subsidies by providing liquidity in the form of V2 LP tokens.

zkFox allows users to use a small amount of capital to borrow more tokens to create LP pairs and then stake them for farming, although this requires paying interest on the borrowed funds. Let's take the example of ETH/USDC LP to explain the leveraged farming process in detail:

Suppose a user has a total value of $1,000 in ETH and USDC (it doesn't have to be $500 of each; we will automatically balance the ratio). The user wants to farm and chooses a 2x leverage. In this case, zkFox will automatically borrow $1,000 worth of tokens for the user and then stake them together as LP tokens for farming. If the LP farming yield is 50%, the user can achieve a 100% return (excluding the borrowing interest rate).

If there is a fluctuation in the price of ETH, liquidation may be triggered. When the total value of the user's LP tokens drops below $1,200, to protect the safety of depositors' assets, we will unstake the LP tokens, repay the borrowed funds, and return the remaining assets to the user.