Delta Neutral ETH With rETH & USDC Yields
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Visit Discover to deposit into this strategy and automate your yields!
By combining 2 opposing Long and Short positions, this strategy earns yields while maintaining its value throughout short term market volatility. A fall in ETHâs price is covered by a short ETH position and vice versa.
Half of the USDC deposited is used to create a 2.9x rETH/ETH Long position with a 5% liquidation buffer. This earns 1x rETH yield plus an additional 1.9x interest differential between rETH yield and ETH borrow. This is a ETH long position which earns additional liquid staking yields.
The remaining USDC is used to create a 2x USDC/ETH Short position. This earns 1x USDC supply interest plus an additional 1x interest differential between USDC supply and ETH borrow.
+ USDC Supply Interest
+ rETH Liquid Staking Yields
+ rETH Supply Interest
- ETH Borrow Interest
Create 2x USDC/ETH Short
Flash loan 1x of 50% $USDC balance
Lend 50% initial $USDC + flash loaned $USDC amount
Borrow $ETH to cover flash loan
Swap $ETH â $USDC
Create a 2.9x rETH/ETH Long
Flash loan 1.9x of 50% $USDC balance in rETH
Swap initial 50% USDC â rETH
Lend all rETH
Borrow ETH to cover flash loan
Swap ETH â rETH
Exit Strategy
Factor Discover also enables Depositors to permissionlessly withdraw from any strategy at anytime via an Exit Strategy.
Visit our Exit Strategy explainer to see how Factor Studio strategies can maximize returns while ensuring truly permissionless withdrawals.
USDC supply interest and rETH liquid staking yields are greater than WETH borrow costs.
rETH price continously increases relative to WETH.
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