WBTC Base Switch On rETH For ETH & USDC Yields

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Description

https://studio.factor.fi/?hash=0xb53572bd4b8e3a597bfb7589faec5828432da28cfd9e16de9cd93097c7ce35ab

An ETH rotation play which earns USD yields on rETH by switching the base asset from USD → WBTC. This strategy profits when ETH outperforms WBTC and is profitable as long as the generated USDC lending interest is greater than rETH to WBTC underperformance.

+ USDC Lending Interest

+ rETH Liquid Staking Yields

+ rETH Lending Interest

- WBTC Borrow Interest

Strategy

Main strategy

1. Flash loan $rETH equivalent to 100% USDC value

2. Lend $rETH - Aave

3. Lend $USDC - Aave

4. Borrow $WBTC

   1. 100% of initial $USD value

5. Swap all $WBTC → $rETH

Exit Strategy

1. Close remaining debt

2. Swap all to withdraw token

Exit Strategy

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Visit our Exit Strategy explainer to see how Factor Studio strategies can maximize returns while ensuring truly permissionless withdrawals.

Protocol Parameters

Aave

• ~6% USDC Supply Interest

• ~0.02% rETH Supply Interest

• ~0.3% WBTC Borrow Interest

• 75% USDC Max LTV

• 69% rETH Max LTV

Rocket Pool

• ~2.7% rETH Liquid Staking Yields

OpenOcean

• 0.1% Max Slippage Config

Strategy Performance Conditions

Profit

• WETH, and by extension rETH, outperforms WBTC for the period of the deposit.

• USDC supply interest and rETH liquid staking yields are greater than WBTC borrow costs.

Loss

• WBTC outperforms WETH.

• rETH depegs from ETH.

Calculation Template

Create Your Own Strategies!

Create a copy of the sheet below and tweak it to create your own personalized strategy.

https://docs.google.com/spreadsheets/d/1FvNDdfvoec_mQCiDzIPjEGrJWM652I1S2fWFMlK83qE/edit?usp=sharing

Estimate Returns

The profitability of this strategy depends on the performance of ETH relative to WBTC. Aside from potential trading returns, the strategy also earns a net yield of ~6.7% (as of 06/03/25) that comprises of:

• USDC lending interest

• rETH liquid staking yields

• WBTC borrow costs