Amplified cbETH Yields On cbBTC Lend - Aave
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Description
The vault collateralizes cbBTC on Aave to earn amplified interest differentials on borrowed ETH.
By collateralizing the cbBTC deposit, the vault is able to borrow ETH with a 20% liquidation buffer while earning a minor cbBTC supply interest.
Borrowed ETH is swapped for cbETH to create a 3.5x leveraged cbETH:ETH position on Aave that earns amplified interest differentials between cbETH liquid staking yields and ETH borrow costs.
+ cbBTC supply interest
+ cbETH liquid staking yields
- ETH borrow interest
Strategy
Lend $cbBTC - Aave
Borrow $ETH
60.83% deposit for 20% buffer against LTV
Flash loan 2.5x the borrowed $ETH amount
5% buffer from LTV
Swap all $ETH → $cbETH
Lend all $cbETH - Aave
Borrow $ETH to cover flash loan
Flash loan $ETH
Repay $ETH debt - Aave
Withdraw $cbETH collateral - Aave
Swap $cbETH → $ETH
Repay $ETH debt - Aave
Withdraw $cbBTC collateral - Aave
Withdraw $cbBTC
Protocol Parameters
~3.09% cbETH Liquid Staking Yields
0.1% Max Slippage Config
Strategy Performance Conditions
cbETH continuously increases in value vs WETH.
WETH borrow cost is less than cbETH liquid staking yields across Aave
cbBTC supply interest is greater than the interest differentials between cbETH yield and WETH borrow.
cbETH depegs from ETH.
cbETH liquid staking yields falls below WETH borrow costs.
Calculation Template
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Estimated Returns
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