How to Participate

Role types

As a user, you can participate in H2O Finance in 3 different ways:

• Lender: H2O Finance allows you to earn returns on your base assets by depositing them into the Bank. These assets will then be offered to yield farmers or margin trading investors for leveraging up their positions.

• Farmer: As a farmer, you can earn a higher yield by opening a leveraged position on H2O Finance. Of course, this comes with bigger risks: liquidation, impermanent loss, etc.

• Trader: Traders can borrow funds from the Bank on margin, entrusting strategic contracts to execute transactions through Biswap and PancakeSwap by buying /selling target assets. Margin trading pairs planned for the first phase: BTCB/USDT, ETH/USDT, BNB/USDT.

Use cases

In this example below, we show how each participant works together in our ecosystem:

• Mr. A, the lender deposits her BNB into the Bank; his asset becomes available to borrow for a farmer of leveraged yield farming or a trader of margin trading, he earns returns from debt interests paid by farmers or trader who borrowed BNB from the Bank.

• Mr. B, the yield farmer wants to open a leveraged yield farming position on the BTC/BNB pair with 2X leverage; he borrows BNB from the Bank and enjoys 2 times of yield farming rewards while being obligated to pay back equal value BNB and pay borrowing interest when closing position.

• Mr. C, the margin trading investor is optimistic about BNB. He can open a long position for BNB with 5 times leverage through H2O M, providing BNB as principal and borrowing USDT from H2O Finance Bank to buy BNB and entrust it to H2O Finance Vault Contract. Mr. C will pay borrowing interest to H2O Finance Bank for the USDT loan and get 5 times amplified gains from the rise in BNB price.

Tips: H2O Finance's smart contract takes care of all the mechanics behind the scenes - optimally switching assets to the right ratio, providing liquidity to the pool, and staking LP for MDEX or PancakeSwap rewards.