Additional Liquid Staked ETH Yields On USDC Lend

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Description

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

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

+ USDC Lending Interest

+ rETH Liquid Staking Yields

+ wstETH Liquid Staking Yields

- ETH Borrow Interest

https://studio.factor.fi/?hash=0x203b3da5bb64d3119528042d367a214d8778eca0821dc91d9d285bbaf47c9a87

Strategy

Main strategy

1. Lend all $USDC - Aave

2. Borrow $WETH

   1. 62.5% of collateral value for 20% buffer

3. Swap 50% $WETH → $rETH

4. Swap 50% $WETH → $wstETH

Exit Strategy

1. Swap $rETH → $WETH

2. Swap $wstETH → $WETH

3. Repay $WETH debt - Aave

4. Withdraw $USDC collateral

5. Close remaining debt

6. 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

• ~6% USDC Supply Interest
• ~2.4% WETH Borrow Interest
• 75% USDC Max LTV

Rocket Pool

• ~2.7% rETH Liquid Staking Yields

Lido

• ~2.8% Liquid Staking Yields

OpenOcean

• 0.1% Max Slippage Config

Strategy Performance Conditions

Profit

• rETH/wstETH continuously increases in value vs WETH.

• WETH borrow cost is less than rETH/wstETH liquid staking yields.

• USDC supply interest is greater than the interest differentials between rETH/wstETH yield and WETH borrow.

Loss

• rETH/wstETH depegs from ETH.

• rETH/wstETH 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/1_vACL35FxqB018yxyZ6FrHixxcVuZ2sWrOLPr3UX0C4/edit?usp=sharing

Estimated Returns

https://docs.google.com/spreadsheets/d/1Mj0kiPxqtbJeJAC5CSExpDxvEzs4dlUH7Wktwjx4dlk/edit?usp=sharing