This tutorial presents detailed steps by which users can leverage their current crypto investments through a clever combination of Mai Finance’s 0% interest loans and the Aave protocol.

# But a thousand words are also not that bad

The picture above demonstrates how you can utilize Mai Finance to increase the earning power of your crypto investments.
Let's assume that you really like MATIC, and think that it's currently undervalued. You think it has the potential to reach $2,$5 or even $10 per token (and you may actually be totally right). However, as a small investor, you only have$100 worth of MATIC token in your wallet on Polygon. Through this tutorial we will show how you can generate more MATIC from your current tokens, because hodling is good, but putting your investment to work is better.

## 200% Collateral to Debt Ratio

Loop Iteration
Investment
Debt
Estimated Revenue
Equivalent APY
1
$1,000.00$500.00
$49.30 4.930% 2$1,500.00
$750.00$73.95
7.395%
3
$1,750.00$875.00
$86.75 8.628% 4$1,875.00
$937.50$92.44
9.244%
5
$1,937.50$968.75
$95.52 9.552% 6$1,968.75
$984.38$97.06
9.706%
7
$1,984.38$992.19
$97.83 9.783% 8$1,992.19
-
$98.21 9.821% Adding more debt past Loop 7 would only increase my investment by less than$10 (1% of my initial investment), so this is the appropriate time to stop. The increase in APY is negligible at this stage, and I keep a collateral to debt ratio of 200.79%, which is safe enough.
As you can easily see, using a combination of Aave and Mai Finance results in almost 2x the initial APY and significantly more market exposure to the token of choice, when compared to simply holding or using Aave in isolation.

## 175% Collateral to Debt Ratio

Loop Iteration
Investment
Debt
Estimated Revenue
Equivalent APY
1
$1,000.00$571.43
$49.30 4.930% 2$1,571.43
$897.96$77.47
7.747%
3
$1,897.96$1,084.55
$93.57 9.357% 4$2,084.55
$1,191.17$102.77
10.277%
5
$2,191.17$1,252.10
$108.02 10.802% 6$2,252.10
$1,286.91$111.03
11.103%
7
$2,286.91$1,306.81
$112.74 11.274% 8$2,306.81
$1,318.18$113.73
11.373%
9
$2,318.18$1,324.67
$114.29 11.429% 10$2,324.67
-
$114.61 11.461% Adding more debt past Loop 9 will not increase my investment by more than$10, so this is an appropriate place stop. The resulting CDR from 9 loops is 175.49%.
We can easily see that with a more aggressive approach the final APY is also more attractive. This is typically true with any DeFi strategy: the greater the risk, the greater the potential reward.

## More numbers

If you are mathematically inclined, then you can calculate your final investment based on the initial investment and the collateral to debt ratio you wish to target. The formula is as follows:
$Final Investment = Initial Investment *\sum_{i=0}^{n}{\frac{100}{CDR}}^i$
Where n represents the number of loops you want to apply and CDR is your targeted collateral to debt ratio in percentage.
In the example of a 200% targeted CDR with 7 loops, the calculation is as follows:
$Final Investment = 1000 *\sum_{i=0}^{7}{\frac{100}{200}}^i$
$Final Investment = 1000 * (\frac{1}{2}^0 + \frac{1}{2}^1 + \frac{1}{2}^2 + \frac{1}{2}^3 + \frac{1}{2}^4 + \frac{1}{2}^5 + \frac{1}{2}^6 + \frac{1}{2}^7)$
$Final Investment = 1000 * (1 + 0.5 + 0.25 + 0.125 + 0.0625 + 0.03125 + 0.015625 + 0.0078125)$
$FinalInvestment = 1000 * 1.9921875 = 1992.1875$
Using the same method, you can also calculate your final APY with the equation below:
$Equivalent APY = Initial APY * \sum_{i=0}^{n}{\frac{100}{CDR}}^i$
Once again, with our targeted CDR of 200%, an initial APY of 4.93% and 7 loops, we calculate the same final APY as shown above the tables.
$Equivalent APY = 4.93 * 1.9921875 = 9.821484375$

# Disclaimer

Everything presented in this strategy assumes the following:
• The Aave APY is stable and remains the same over the span of 1 year (APY will have some variance)
• The Polygon APR granted on Aave is stable and remains the same over the span of 1 year (which is unlikely)
• The MATIC token keeps a relatively stable price over the span of 1 year (also unlikely)
Keep in mind that a strategy that works well at a given time may perform poorly (or make you lose money) at another time. Please stay informed, monitor the markets, keep an eye on your investments, and as always, do your own research.
When a picture is worth a thousand words
But a thousand words are also not that bad
Use Aave to increase your capital
Use Mai Finance to compound your Aave tokens
amTokens VS camToken
Borrow MAI stable coin