AUSD loops on Monad go brrrrrr

Hi friends 👋,

I was farming Monad when mainnet first went live because the incentives were juicy and everyone on CT suddenly turned into a part-time stablecoin strategist. Once the obvious stuff cooled off, I moved on.

But one farm still looks worth the hassle.

Today’s thing is AUSD loops on Monad.

Here’s the setup:

That’s the farm.

I care because the incentives are still good enough to push returns into above-average territory if you’re willing to do the annoying part and actually manage the loop.

Let’s get to it.

AUSD is Agora’s stablecoin.

The pitch is refreshingly boring: 1:1 minting, fiat-backed reserves, and actual redemption rails through USDC and USDT. Agora says the reserves are cash, overnight repo or reverse repo, and short-term U.S. Treasuries.

I like stablecoins that sound like they were designed by someone with a pulse and a compliance team.

AUSD gives you a more legible risk profile than algo stablecoin experiments crypto loves to dust off every cycle.

Boring is good.

Now for the other 2 pieces of the machine.

Upshift is the yield layer. Agora EarnAUSD is a curated vault powered by Upshift, so instead of holding raw AUSD and staring at it like a depressed money market fund, it routes stables into different protocols (Morpho, Euler, Gearbox, etc).

Curvance is the borrow layer. You post the earnAUSD position as collateral, borrow against it, and feed the borrowed AUSD back into the vault.

That’s what creates the loop.

I don’t care about this because Monad is spiritually important, or because I want to spend my afternoon writing fan fiction about vault architecture.

I care because the incentives are good and the math is good enough, for now.

Monad is subsidizing activity. You’re earning vault yield, picking up incentives on the lending side, and getting paid on the borrow side too. Those incentives are the key driver of AUSD adoption on Monad.

If you loop it carefully, the blended return gets pretty attractive pretty fast. You’re getting paid to take a very specific stack of risks.

That’s much more honest.

This is the section where newsletter writers usually start waving around a shiny APR number like they just discovered religion. I’m going to be a little more annoying than that.

The only numbers that matter are the live ones:

That’s the real game.

If the vault yields 11% and borrowing costs 4%, great. If the vault yields 8% and borrowing costs 7.2%, congrats on your new unpaid internship as a risk manager.

For context, on my own position, I’m running roughly 5x leverage, and the APR is coming out to around 22% at current rates and incentives (you need to manually claim MON rewards, swap them for AUSD & deposit into Upshift & Curvance to maximize yield).

That is a snapshot, not a promise from God.

If emissions fade, borrow costs rise, or utilization gets weird, that number can get humbled very quickly.

Now let’s make it practical.

Start with USDC or USDT on whatever chain you’re already on.

Your first job is getting stables onto Monad.

Option A:

Option B:

Once you have AUSD, deposit it into Upshift’s Agora EarnAUSD vault.

This is where idle stables become productive dollars. Upshift routes into strategies across protocols like Morpho, Euler, Curvance, and Gearbox, which gives the rest of the trade something worth levering.

Next, take that earnAUSD position and use it inside Curvance as collateral.

And now you’ve completed one full loop.

Take the borrowed dollars and run the sequence again.

AUSD. Upshift. Curvance. Borrow. Repeat.

Every extra loop increases your APR. It also increases the odds that a mildly annoying day becomes a full “wtf why did I get liquidated farming stables” day.

That’s the bargain.

DeFi has enough people telling you every trade is free money if you just believe hard enough.

I’m not one of them.

If borrowing costs rise and vault yield doesn’t, the yield compresses. The farm quietly goes from attractive to mid, then from mid to dumb.

A lot of what makes this trade good right now is incentives. Keep track of WMON rewards on Curvance.

If getting into or out of earnAUSD / AUSD gets expensive, you start leaking from places the homepage didn’t mention.

Yep, you can get liquidated if you push the position too far and don’t manage it.

Stablecoin loops are especially good at making people feel safe right before they get punched in the mouth.

At minimum, you are taking exposure to:

So when you size this, remember you’re not buying a Treasury ETF. You’re running a multi-protocol machine held together by incentives, plumbing, and your own willingness to babysit it.

That’s a very different sport.

This is for someone who already understands collateralized borrowing, knows what looping does to risk, and doesn’t panic when your loan dashboard starts looking ugly for 5 minutes.

It’s for someone who wants more than plain stablecoin yield and is willing to work for it.

If you want set-and-forget, this belongs in the “interesting, but I’m not trying to die over a few extra points of yield” folder.

I think this is a good farm right now because the incentives are doing what incentives are supposed to do. They are paying you enough to care.

On my own setup, with roughly 5x exposure, I’m seeing something around 22% APR. That’s enough to make me pay attention.

If incentives fade or borrow costs moves up, this thing goes from clever to stupid in a hurry.

So my verdict is simple.

If you already know how to manage a loop, this is worth looking at.

If you don’t, this is exactly the kind of trade that will teach you the lesson in the most expensive possible way.

Happy farming.

Thanks for reading,
Boring Money

P.S. I got tired of doing the loop math like a caveman, so I vibe-coded a simple calculator for this farm.

You can enter your starting earnAUSD, number of loops, deposit APY, and net borrow cost, and it’ll estimate the effective APR.

If you want it, just reply and I’ll send you the link.