Was messaging a bit w/ Rhizome in the ICON Defi Disussion Telegram Page, extremely helpful and considerate person!
Let's Assume a person named John has 500 ICX valued at $1.00 USD each and he is not liquidated due to sharp price drop.
Using Balanced,
1) John can transfer his 500 ICX to his Balanced wallet
2) Borrow at a 5:1 ratio and receive 100 ICON Dollars (ICD). (due to overcollaterilization ratio)
2a) John's ICX Collateral is staked earning staking rewards while he is using his ICD
2b) As a result of providing collateral for ICD he receives BALN tokens as a reward
3) John can now transfer his 100 ICD to the Balanced DEX and and provide liquidity to earn more BALN Tokens
4) John can then transfer his BALN tokens to the OMM Platform and provide liquidity on that platform earning BALN interest + OMM Tokens.
5) Once John wants his ICX back, he reverses this process and his position is now:
( Original ICX Amount ) + (ICX Staking Rewards) + ( BALN from ICX Collateral usage ) + (BALN from ICD Liquidity Providing) + (BALN lent out interest) + (OMM Tokens)
Reward Ratio follows a general equation: r=(x/y)*z
where: { r=reward, x=provided coin amount, y=total coin amount, z=BALN allocation }
If others could add to the discussion:
1) what risks do we see?
2) what is an amount of ICX to start with to earn a significant enough of returns?
3) do we see BALN & OMM Tokens appreciating - are there comparable tokens existing that we can use as a means to measure against and potentially get an idea of what we are getting into?
4) any other thoughts / suggestions?
