8.2x cbETH:ETH Auto-Compounder - Compound

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Description

This vault creates 8.2x leveraged cbETH:ETH position that earns 1x cbETH liquid staking yields plus an additional 7.2x interest differential between cbETH yields + COMP rewards and WETH borrow costs.

Deposited cbETH is supplied to Compound enabling the strategy to borrow WETH which is then swapped for more cbETH. This process is repeated to get up to 8.2x leverage which provides a 2.5% liquidation buffer.

+ cbETH liquid staking yields

+ COMP borrow rewards

- ETH borrow interest

Strategy

  1. Claim all COMP rewards

  2. Swap COMP β†’ cbETH

  3. Flash loan 7.2x the $cbETH amount (deposits plus rewards)

  4. Lend all $cbETH - Compound

  5. Borrow $ETH to cover flash loan

  6. Swap borrowed $ETH β†’ $cbETH

Protocol Parameters

Strategy Performance Conditions

  • cbETH continuously increases in value vs WETH.

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

Calculation Template

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https://docs.google.com/spreadsheets/d/1kd49sUMJDpyLJbfcsxTlvWb70yQ1WgBoxi5VZfyKvf4/edit?usp=sharingarrow-up-right

Estimated Returns

https://docs.google.com/spreadsheets/d/17M1vigyilyLs-DlAqLCG2-Q9DtOTP2Bd7BlnaV38k04/edit?usp=sharingarrow-up-right

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