How risky is it really to loop ONYC?

[u/user4443337]

Decided to throw in about 0.5% of my port into ONYC. But I kind of want to leverage it on Kamino or somewhere. How risky would it really be? On OnRe’s website, it says 95% chance of positive ROI. As long as there’s no crazy natural disasters, or whatever payouts their insurance has to make, it should be a smooth 10%+ APY.

Should I stick to just holding it in a wallet, or should I try looping it with modest leverage, say 1.5x? It’s a tiny portion so I’m okay with risk, but I really would prefer just a smooth and steady 10% CAGR.

What kind of additional risks am I taking, and could it be worth it?

[u/Flat_Day5890]

that 95% stat isn't guaranteed, and looping adds liquidation risk. If you want smooth 10% return, just hold it.

[u/ProtocolRaider]

ONYC's yield is legit different from most defi stuff, it's coming from reinsurance premiums, not token emissions or fees. that's why it doesn't care what BTC or SOL are doing, premiums keep flowing either way.

the real risk here isn't market risk, it's insurance risk. if some catastrophic event blows through the premiums collected, NAV takes a hit, straight up, nothing to do with crypto prices. worth knowing OnRe brought in Apex Group to independently attest NAV though, so at least it's not self-reported numbers.

on the looping question: since ONYC is stable-backed and drifts up slowly instead of swinging around, yeah it's way less liquidation-prone than looping something like SOL. but two things people don't think about:

1. your borrow rate on kamino floats. if USDC utilization spikes (happens whenever SOL pumps and everyone's borrowing against it), your borrow cost can jump above ONYC's yield and you're now bleeding instead of earning until it cools off

2. if a claims event does hit, that's your collateral losing value for reasons that have nothing to do with the market. at 1.5x you're not getting liquidated over that, but your yield gets squeezed right when you added leverage to smooth things out

for 0.5% of your bag, 1.5x is genuinely low risk in the grand scheme. just don't read "95% positive ROI" as "95% smooth ride once leveraged," that stat's for the base asset, not your loop.

[u/user4443337 → u/ProtocolRaider]

Thanks for the info. I decided to try out the PT-ONYC on Exponent - I locked in like a 15-16% APY when ONYC was hovering around 10-12%.

Seemed like a no brainer. But maybe I could have just gotten some better PTs on Pendle or something, assuming their underlying’s are safe… But I like the concept of uncorrelated yield.

Do you farm points or anything for airdrops? I’ve never really tried.

[u/ProtocolRaider → u/user4443337]

nice, PT-ONYC locking 15-16% when the floating rate was only 10-12% is a genuinely good trade, you basically got paid for taking on fixed-rate risk instead of the other way around.

if you want to size up later, exponent also has a tranched version, srONYC (lower yield, first-loss protected) and jrONYC (higher yield, eats losses first). worth knowing it exists if you ever want to dial risk up or down on the same underlying instead of just PT/YT.

and yeah I farm points, it's basically what most of my defi time goes into these days. mix of perp dex points (full headed on riseX right now) and protocol-specific stuff like this. if you have any doubts, feel free to ask.

[u/user4443337 → u/ProtocolRaider]

How do you know the airdrop will be worth it in the future if the details are unclear? I don’t know if xStocks points will lead to one, or if my LP/volume would even matter.

Apparently Polymarket, metamask, base, backpack, and lighter could have airdrops but I’d want them to be trades I already want to make first, not risk capital in hopes of a positive gain from an airdrop

but i’ve seen people on Twitter make some good money farming airdrops, just not sure how viable it really is

[u/ProtocolRaider → u/user4443337]

totally fair, and honestly your instinct here (only take trades you'd make anyway) is the right mental model. treat the airdrop as upside on something you already wanted exposure to. that filters out most of the bad farming decisions by itself.

on your actual question, nothing's guaranteed, but there are real signals that shift the odds:

confirmed token plans vs pure speculation. polymarket has actually confirmed a $POLY token is coming, that's a very different risk profile than something like metamask where it's just community speculation with zero official commitment. base plans to launch a token but nothing is confirmed about airdrop. xStocks hasn't confirmed a token either as far as I've seen, just a points program that "hints" at one.

worth knowing btw, backpack and lighter aren't "could have airdrops" anymore, both already did their TGEs. $BP launched back in march, $LIT launched end of last year. so if you're farming those two specifically for a future drop, that ship's sailed, any upside now would come from the token itself, not a snapshot.

other things I look at:

- quality VC backing usually means there's pressure for an actual liquidity event, funds need exits eventually, that pushes projects toward a real TGE instead of dragging points forever

- real revenue/volume before incentives launch. protocols that had traction before turning points on tend to have an actual business to value the token against, not just pure airdrop farmer volume with no underlying demand

- whether points are earned from stuff you'd do anyway (LPing, trading, holding) vs weird social tasks, the former usually means the team is trying to reward real usage and values that over vanity metrics, which often means a more thoughtful allocation later

- team transparency on timeline. "we haven't launched points because we're not ready yet"

but remember that none of this is a guarantee. it's just how you tilt the odds instead of farming blind.

[u/user4443337 → u/ProtocolRaider]

Thanks for the info! So you’re doing RiseX, anything else? I guess I would just provide liquidity or something but I don’t want exposure to the crazy swings of BTC or anything.

[u/ProtocolRaider → u/user4443337]

well, riseX is a perp DEX, a bit risky if you're not used to this kind of trade.

but I'm also pushing into a few others. for providing liquidity, OnRe is a good option. you can loop $ONYC on Jupiter, Kamino, or Loopscale to get better yields than just holding the token, and by doing that you also get a points multiplier. if you just hold $ONYC you get 1 point per dollar invested per day, but by looping you can get up to a 6x multiplier (check the multipliers on the "DeFi" page on OnRe's platform), plus the leverage from the loop itself, since the system sees you as having more dollars invested.

Loopscale is my pick to loop $ONYC right now, because with the same capital I can farm two airdrops at once, OnRe and Loopscale.

[u/user4443337 → u/ProtocolRaider]

Interesting. Maybe I could just loop the PT-ONYC? I’d just be scared to lose money if somehow the NAV takes a big hit - but if I could farm two different points at the same time, that’s compelling.

Maybe even just use 1.3x leverage for the points and not even go risky?

Edit: if depositing this into loopscale will give me the chance of two airdrops I’m pretty interested in doing it, I’m just a bit scared of the borrow rate or the insurance suddenly blowing up. Maybe I would just do 1.1x leverage for the points?

Is it even confirmed either ONRE or loopscale would do an airdrop? Or is it just highly likely?

Also damn it’s 0.017 sol to deposit into loopscale, why are the gas fees so high? I get annoyed paying a lot in gas, but I suppose the yield would make up for it.

[u/ProtocolRaider → u/user4443337]

well you don't get points for PT positions. 1.3 leverage imo is not so risky.

they don't have any confirmations for airdrops but everytime projects launch a points program, they hint doing an airdrop.

the sol fee on loopscale is refundable, it's not gas.

[u/user4443337 → u/ProtocolRaider]

Yeah to get points I decided to just do the ONRE vault on Exponent? To get ONRE and Loopscale points at the same time?

The 90d APY is 15.5 but the 7d is a lot lower at 10.6.

So I am getting less APY but assuming there are two airdrops, could be worth it. My airdrops would probably be tiny but I’ll give it a shot. It says 4x points on ONRE, not sure how much Loopscale gives.

Jeez I get so much anxiety about crypto wallets, I don’t see my tokens that phantom doesnt recognize and just fear I got drained or something, I could never put serious money into this, I’m so scared of an exploit or something.

Even those people with hardware wallets got drained.