wstETH:ETH Loop Optimizer - Aave, Compound, Morpho

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Description

This vault optimizes looped wstETH returns by constantly scanning for the lowest ETH borrow rates across Aave, Compound, & Morpho wstETH:ETH markets.

By repeatedly borrowing WETH against wstETH when the borrow rates are low, the vault is able to multiply the interest differentials (i.e. yield carry). A wstETH:ETH Long position is created with a 2.5% liquidation buffer on the identified market.

Positions are migrated between markets with minimal price impact as only the portion of liquidity relating to the differing max loan-to-value ratios are swapped.

Any earned rewardsa are automatically compounded for more wstETH.

+ wstETH liquid staking yields

+ COMP borrow rewards

- ETH borrow interest

Strategy

https://studio.factor.fi/builder?hash=0xea11bc07cca5a11476a30cfaa1db5c6a5e578799

Main strategy

1. Flash loan $WETH up to 16.1x (dependent on market)

2. Swap WETH → wstETH

3. Lend all $wstETH on market with lowest $ETH borrow

4. Borrow $ETH to cover flash loan

Exit Strategy

Refinance

Protocol Parameters

Aave

• ~2.05% WETH Borrow Interest

• 75% wstETH Max LTV

Compound

Morpho

Lido

OpenOcean

Strategy Performance Conditions

Profit

• wstETH continuously increases in value vs WETH.

• WETH borrow cost is less than wstETH liquid staking yields

Loss

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/1rjcct3uyf9jqAZ8u8tDqNaio_7EZzbkoMFUO2rja1nA/edit?usp=sharing

Estimated Returns

https://docs.google.com/spreadsheets/d/111hgqzIM5Eb-l8fZAIpEiTpLOUOTF8GkKMNywkomVjA/edit?usp=sharing