4.4x cbETH Carry + 1x USDC Lending Yields - Aave & Compound
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Description
This strategy earns blended USDC and ETH yields by taking advantage of differences in Aave and Compound.
By depositing USDC into Aave, this strategy earns 1x the Aave USDC lending interest. This also allows the strategy to borrow WETH against the USDC collateral with a 20% buffer.
Borrowed WETH from Aave is swapped for cbETH earning the interest differentials between cbETH liquid staking yields and Aave WETH borrow interest.
The cbETH is then used to create a 7x leveraged cbETH:ETH position (5% liquidation buffer) which earns an additional 6x interest differential between cbETH liquid staking yields and Compound WETH borrow interest. The total WETH borrowed on Compound also earns additional COMP borrow rewards.
+ USDC supply interest (Aave)
+ cbETH liquid staking yields
- ETH borrow interest
+ COMP rewards on ETH borrow (Compound)
Strategy
Lend $USDC - Aave
Borrow $ETH
62.5% deposit for 20% buffer against LTV
Swap borrowed $ETH → $cbETH
Flash loan 6x the borrowed $cbETH amount
5% buffer from LTV
Lend all $cbETH - Compound
Borrow $ETH
Swap $ETH to $cbETH to cover flash loan
Protocol Parameters
Strategy Performance Conditions
cbETH continuously increases in value vs WETH.
WETH borrow cost is less than cbETH liquid staking yields across Aave and Compound (including COMP rewards).
USDC supply interest is greater than the interest differentials between cbETH yield and WETH borrow.
Calculation Template
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Estimated Returns
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