Additional cbETH Yields On USDC Lend

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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

  1. Lend all $USDC - Aave

  2. Borrow $WETH

    1. 62.5% of collateral value for 20% buffer

  3. Swap $WETH → $cbETH

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

Strategy Performance Conditions

  • 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.

Calculation Template

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

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