7.1x wstETH:ETH Auto-Compounder - Compound

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Description

This vault creates 7.1x leveraged wstETH:ETH position that earns 1x wstETH liquid staking yields plus an additional 6.1x interest differential between wdtETH yields and WETH borrow costs.

Deposited wstETH is supplied to Compound enabling the strategy to borrow WETH which is then swapped for more wstETH. This process is repeated to get up to 7.1x leverage which provides a 2.5% liquidation buffer.

+ wstETH liquid staking yields

+ COMP borrow rewards

- ETH borrow interest

Strategy

  1. Claim all COMP rewards

  2. Swap COMP β†’ wstETH

  3. Flash loan 6.1x the $wstETH amount (deposits plus rewards)

  4. Lend all $wstETH - Compound

  5. Borrow $ETH to cover flash loan

  6. Swap borrowed $ETH β†’ $wstETH

Protocol Parameters

Strategy Performance Conditions

  • wstETH continuously increases in value vs WETH.

  • WETH borrow cost is less than wstETH liquid staking yields plus COMP rewards

Calculation Template

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https://docs.google.com/spreadsheets/d/1EvGaQUkjT2ii665pMIWHKKMwL-6aepkKcezswitJEjU/edit?usp=sharingarrow-up-right

Estimated Returns

https://docs.google.com/spreadsheets/d/19zQ5sSqL81xaurh-m2iKc2DHLU5_gADJNmBKkijrb4k/edit?usp=sharingarrow-up-right

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