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Sections used: Margin · Farm  ·  Delta exposure: None (XLM-neutral)  ·  Risk level: Low–Medium  ·  Complexity: Medium
Deposit USDC as Margin collateral, borrow XLM from Vanna, and supply that borrowed XLM directly into a Blend XLM single-asset pool via Farm. Your debt is denominated in XLM and your farm position is denominated in XLM - so XLM price movement affects both sides equally and cancels out. Your P&L depends entirely on the rate differential, not on where XLM trades.

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Why this is delta-neutral

When XLM rises in price:
  • Your farm position (XLM) increases in USD value - gain.
  • Your borrow debt (XLM) increases in USD value - loss of the same magnitude.
  • Net: zero.
When XLM falls in price:
  • Your farm position decreases in USD value - loss.
  • Your borrow debt decreases in USD value - gain of the same magnitude.
  • Net: zero.
The only source of profit or loss is the rate spread: Blend XLM supply APY minus Vanna XLM borrow APR. As long as the Blend pool pays more than Vanna charges, the strategy earns a positive return independent of price.

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How to execute

1

Open a Margin Account

If you don’t have one yet, go to Margin → Open Account. See Open a Margin Account.
2

Deposit USDC as collateral

Go to Margin → Deposit & Borrow → deposit USDC from your wallet. USDC backs the XLM borrow and is not exposed to XLM price movement.
3

Borrow XLM

In the borrow panel, select XLM as the borrow asset. Use the leverage slider and keep your Health Factor at 1.5× or above. Since your farm and debt are both in XLM, your HF is insulated from XLM price moves - the main risk is from accruing interest.
4

Deploy borrowed XLM to the Blend XLM pool

Go to Farm → Single-Asset Pools → select the Blend XLM pool → enter your full XLM balance → click Add Liquidity and confirm. The XLM immediately starts earning Blend’s supply APY.

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Example

USDC collateral deposited$500 USDC
XLM borrowed (at conservative LTV)$250 worth of XLM
XLM deployed to Blend XLM pool$250 worth of XLM
Blend XLM Supply APY12%
Vanna XLM Borrow APR8%
Rate spread4%
Net annual yield on deployed XLM~10on10 on 250 - regardless of XLM price
This strategy is profitable only when Blend’s XLM supply APY exceeds Vanna’s XLM borrow APR. Check both rates before entering and monitor the spread over time.

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Risk profile

RiskLevelNotes
XLM price riskNoneFarm position and borrow debt cancel each other out
Liquidation riskLowHF changes only from accruing interest, not price movement
Rate riskMediumStrategy turns negative if Vanna’s borrow rate rises above Blend’s supply rate
Smart contract riskLowInherent to all on-chain protocols

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What to monitor

Rate spread - This is the only lever that determines profitability. If Vanna’s XLM borrow rate rises above the Blend XLM supply rate, exit by withdrawing from the Blend pool first and then repaying the borrow. Health Factor - Accruing borrow interest gradually reduces your HF even with no price risk. Add collateral or make partial repayments if it approaches 1.3×.