The $METAL Yield Equation
By: Jupiter
Say I hold 50,000 METAL.
At $63 per METAL, that position is worth:
50,000 × $63 = $3,150,000
Now use only a controlled slice for borrowing.
A 25% loan-to-value against $3,150,000 gives:
$3,150,000 × 25% = $787,500
So the loan is $787,500.
Now calculate the cost of capital.
At a 12% annual borrow rate, interest on $787,500 equals:
$787,500 × 12% = $94,500 per year
Monthly:
$94,500 ÷ 12 = $7,875
Debt cost:
$7,875/month
$94,500/year
Now look at the remaining side.
The other 75% of the METAL position equals:
$3,150,000 × 75% = $2,362,500
If that side earns a conservative 4% annual yield, the return becomes:
$2,362,500 × 4% = $94,500/year
Monthly:
$94,500 ÷ 12 = $7,875
So the structure balances:
Borrow 25% at 12% APR
Earn 4% on the remaining 75%
Interest owed: $94,500/year
Yield earned: $94,500/year
Same math in one line:
25% × 12% = 3%
75% × 4% = 3%
A 4% yield on the larger remaining side can fully offset a 12% borrow cost on the smaller borrowed side.
2/2
This is where collateral strategy gets interesting.
The borrowed side creates liquidity.
The productive side services the debt.
Wild yield assumptions are not required. The relationship between loan size and earning base does the heavy lifting.
At these numbers:
50,000 $METAL at $63 = $3,150,000
25% borrowed = $787,500
12% interest cost = $94,500/year
75% remaining value = $2,362,500
4% yield = $94,500/year
Clean symmetry.
Of course, real markets add bite.
Fees exist. Token prices move. Liquidation rules can change. Yields can compress. Borrow rates can rise. Taxes and compounding can alter the final result.
So this is not a risk-free machine.
This is the raw framework.
A smaller borrowed amount can be serviced by a larger yield-bearing base.
In this example, $787,500 borrowed at 12% costs the same annually as $2,362,500 earning 4%. That is the math behind the carry. That is why collateral design deserves serious attention.
#MetalBlockchain by #Metallicus
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