Additional cbETH Yields On USDC Lend

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➡️ Strategy Link

Description

This strategy earns USDC lending interest on Aave and borrows ETH to generate additional cbETH liquid staking yields.

By swapping borrowed ETH for cbETH, this strategy earns the the difference between cbETH liquid staking yields and ETH borrow interest. Liquid staking yields accrues natively to the liquid staked token and is reflected in cbETH price always appreciating against ETH.

+ USDC Lending Interest

+ cbETH Liquid Staking Yields

- ETH Borrow Interest

Strategy

Main strategy

1. Lend all $USDC - Aave

2. Borrow $WETH

   1. 62.5% of collateral value for 20% buffer

3. Swap $WETH → $cbETH

Exit Strategy

1. Swap $cbETH → $WETH

2. Repay $WETH debt - Aave

3. Withdraw $USDC collateral

4. Close remaining debt

5. Swap all to withdraw token

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.

Protocol Parameters

Aave

• ~5.7% USDC Supply Interest
• ~2.5% WETH Borrow Interest
• 75% USDC Max LTV

Coinbase

• ~3.1% rETH Liquid Staking Yields

OpenOcean

• 0.1% Max Slippage Config

Strategy Performance Conditions

Profit

• cbETH continuously increases in value vs WETH.

• WETH borrow cost is less than cbETH liquid staking yields.

• USDC supply interest is greater than the interest differentials between cbETH yield and WETH borrow.

Loss

• cbETH depegs from ETH.

• cbETH liquid staking yields falls below WETH borrow costs.

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/1TLfW0SncYQVlGB5zGZYFP0QLhhWrgI9GsOQl_UC_v6c/edit?usp=sharing

Estimated Returns

https://docs.google.com/spreadsheets/d/1HQixpwzumoEXx8lB-2CI0YBMEUsV-VP_EG_A7O29vmM/edit?usp=sharing