Yield farming + correlated borrowing: the DIY tranching strategy. Stack your income-generating assets with smart borrowed positions that move in sync, and you've essentially built your own risk layering without relying on traditional tranched products. Price volatility gets compartmentalized—higher returns flow to risk-takers, while the stability plays out differently across your positions. It's elegant in theory, lethal if correlations break down.
Yield farming + correlated borrowing: the DIY tranching strategy. Stack your income-generating assets with smart borrowed positions that move in sync, and you've essentially built your own risk layering without relying on traditional tranched products. Price volatility gets compartmentalized—higher returns flow to risk-takers, while the stability plays out differently across your positions. It's elegant in theory, lethal if correlations break down.