A better Alchemix on Terra that uses PoS staking yields

Hi there! :wave:

I’m a total noob on Terra and DeFi, and I’m finding Terra ecosystem so great and exciting.

I was reading about Alchemix and I landed on this thread, trying to compare it with Terra possibilities. And now I read that Kinetic Money is about to launch on Terra, to support the same idea :tada:

BUT, did I understand it right? I’ve got a couple of questions:

  1. Is the APY on the deposit fixed and guaranteed? Anyone can explain how this can be guaranteed? I mean, is it always 100% guaranteed that the loan is gonna self pay in ~12 months?

  2. So the way Alchemix/Kinetic is expected to work, would the following be possible?

    • You deposit/lock 1.000 UST on the protocol as collateral
    • Then you get a loan of 500 UST
    • You take the 500 loan and lock it again
    • You get a second loan of 250
    • Lock it again, and get a loan of 125
    • …Repeat until ~0 (or whatever amount is the minimum for the collateral)

    Then, you wait 1 year for all your loans to self-pay, and everything you locked becomes available, so you end up with $1.000 + 500 + 250 + 125 + 62.5 + 31.25 + … = Something near $2.000 :interrobang: :interrobang:

Am I missing something? Could that be possible to almost double your money in 1 year, doing nothing, with guarantee and no risk? :flushed:

Please, help me understand it :blush:
Thx!

Hi! I’m not sure my post above was notified :point_up: because I made some edits and the anti-spam bot removed it for a while.

This is just in case, if anyone can take a look on my question, cheers :slightly_smiling_face: