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FAQ

What is MilkywayEx Finance?

MilkywayEx is the largest lending protocol allowing leveraged yield farming on Binance Smart Chain. It helps lenders earn safe and stable yields, and offers borrowers undercollateralized loans for leveraged yield farming positions, vastly multiplying their farming principals and resulting profits.โ€Œ
As an enabler for the entire DeFi ecosystem, MilkywayEx amplifies the liquidity layer of integrated exchanges, improving their capital efficiency by connecting LP borrowers and lenders. It's through this empowering function that MilkywayEx has become a fundamental building block within DeFi, helping bring the power of finance to each and every person's fingertips, and every MilkywayEx's paw...
So from the beginning, this has always been a product built by the people, for the people. Or as we like to say: by the Milky, for the Milky.

What is yield farming?

Yield farming is an innovative DeFi concept where users stake or lend their crypto assets, providing liquidity in order to receive returns.

What is leveraged yield farming?

Leverage results from using borrowed capital to expand your asset base and the potential returns on that asset base. In other words, you borrow funds so you can invest more, and as a result--earn more.
In the context of yield farming, leverage involves borrowing assets to multiply your yield farming position, resulting in you accruing larger yields. This is a general profit maximization strategy.

Where does my yield come from?

Thatโ€™s a great question! In fact, you should always try to understand where the yield comes from in each DeFi project.
In MilkywayEx, the source of your yield will depend on how you participate in the protocol:
As a lender, your yield comes from:
  • Interest paid by borrowers to open leveraged yield farming positions (Interest rate is based on lending pool utilization).
  • Incentive rewards paid in MILKY.
  • Incentive rewards paid in tokens of platform partners (in featured pools).
As a yield farmer, your yield comes from:
  • Yield farming incentive rewards from the AMM, if applicable - i.e. CAKE tokens from PCS
  • Underlying trading fees of the pool - i.e. trading fees from the PancakeSwap pools
  • Incentive rewards paid in MILKY (only if you have a leveraged position).

How do I use MilkywayEx?

You can participate in MilkywayEx in three ways:
  • Lender: You can earn safe and stable returns on your tokens by depositing them into our lending vaults. These assets are then offered to yield farmers for leveraging up their positions.
  • Yield farmer: You can borrow tokens from our lending vaults, allowing you to open a leveraged farming position, multiplying your farming APR by up to 6x(minus borrowing interest). Of course, these higher yields come with larger risks than lending: liquidation, impermanent loss, etc.
  • Liquidator: Monitors the pool for leveraged farming positions with Safety Buffers at 0(when equity collateral becomes too low, thus approaching risk of default) and liquidates them. (Bots only)
  • Holder: you can get your reward back by simply holding that token