by Messin' around with Crypto's
Hey folks, I think a big consensus across people in crypto is that $ETH is going to explode. And if you’re an $ETH-maxi, you’re probably also betting on fact that $ETH may even flip $BTC at some point in the next bull market. I’ve been following a lot of different $ETH and $ETH LSD’s (Liquid Staking Derivatives) strategies for some time now, and there’s a ton of different ways that will allow you to earn some pretty nice yields while you’re waiting on number-go-up.
If you’re completely unfamiliar with the process and implications of liquid staking or liquid staking derivatives, I highly encourage that you read the article I wrote before giving a detailed explanation.
For those of you that already are sitting on a bag of $ETH right now, what I hope you gain from this article are some new strategies for how you might get the most yield while you’re waiting for the bull market to get into gear. Many of these strategies have an ETH-staked-derivative (or a collateralized version of $ETH) involved in some shape or another, and in this article I’m not going to speculate on what effects that might have on yield rates, as some of the rates tend to fluctuate (sometimes significantly). Generally speaking however, at least in the case of LSD’s, they should add a bit more to the advertised rates as many do not account for the additional liquid staked APY. In other words, the rates might actually be a little higher than what I have listed below.
Let’s dive into it shall we?
ETH/frxETH pool on Beefy.finance via Thena.fi — 25.62% APR
Frax Finance is one of the newest kids on the block in respect to the LSD game, but they’ve certainly come out the gate roaring with $frxETH. In just under a month they’ve been able to gain 140.52 million in TVL and have amassed 1.26% of the total staked $ETH market share:
This strategy (like the next two) are on Beefy.finance, which has auto-compounding vaults, meaning that they will continually accrue in the native $frxETH/ETH LP token.
Pros: If you’re also bullish on Thena.fi, you can also go straight to their protocol instead, where you’ll accrue yields via $THE token, which at the moment might not be a bad idea considering the price action:
Cons: Only potential cons I can think of on this one is that $frxETH is native to Ethereum mainnet, meaning that you might get raked in gas fees.
wstETH-sETH vault on Beefy.finance via velodrome.finance — 24.51%
As opposed to Frax who has one of the smaller shares, Lido Finance has the absolute largest market share among all staked $ETH derivatives. With the recently introduced ability to wrap their $stETH (turning it into $wstETH), they have allowed their LSD to be bridged to layer 2’s, including Optimism, which this strategy is built upon.
$sETH is not an LSD, but instead “Synthetic Ether,” native to the Synthetix ecosystem. As is with many different synthetic assets, $sETH is fully collateralized against $ETH.
Pros: Optimism has insanely cheap gas fees, and it has Mainnet’s security which is a win-win in my book. Once again instead of doing this strategy on Beefy, you could go straight to the source and put your assets on Velodrome instead, giving you exposure to $VELO, which given the recent price action, might not be a bad idea:
Cons: As you can see from Beefy’s historical rate of returns in the first graphic, there’s not a whole lot of data on this one, meaning that the strategy is relatively new. In other words, only time will tell about how long this rate might last.
alETH/WETH Stable Pool on on Beefy.finance via velodrome.finance — 24.01%
Similar to $sETH, $alETH is a collateralized version of $ETH native to alchemix.fi, where users must place 4x’s the amount of collateral in order to/mint borrow. In other words, if I want to be able to borrow one $alETH, I must put up at least four $ETH as collateral.
Pros: Similar to the previous strategy, this one is also on Optimism, and also on Velodrome, which I’m very bullish on right now. Unlike the $sETH pool however, this one’s historical rates (as seen above) have been steadily increasing for quite some time.
Cons: To be completely transparent, I’ve never really touched alchemix — not because it’s not trustworthy, but because I personally would rather find better ways to borrow (albeit more degen).
WETH-sETH sAMM on Reaper.farm via Velodrome.finance —20.202% APY
The third strategy utilized via Velodrome (noticing a trend?) has been put together by the Byte Masons team on reaper.farm, using wrapped ETH ($WETH) and once again synthetic ether ($sETH). And although this might have the lowest APY on this list, this strategy personally has my most trust. If you’re interested to hear why, I recommend you read my latest article about Justin Bebis (CEO) and the the Byte Masons team:
Why Bebis and the Byte Masons keep pumping $OATH
Hey folks, in preparation for the bull market, I’m still not confidant to put down any bets on any potential 100x gems…
Pros: Once again a strategy on Optimism meaning cheap gas fees. On top of that, a trustworthy team with a standup record for the retailers
Cons: This strategy has the lowest APYs on this list, as well as one of the lowest TVLs (but still significantly sized at almost a quarter of a million).
ETH-pETH Autocompounder on jpegd.io via Curve/Convex—30.86%APR
Saving the highest APR for last, jpegd.io is a borrowing and lending platform where bluechip NFT holders (Cryptopunks, BAYC, MAYC, Azukis, etc.) can put up their pieces of art up as collateral, borrowing $pETH in return.
Taking this one step further, you can also earn $JPEG at a rate of 33.82% APY on top of your LP:
Pros: I guess the high APY rate should say it all, I should also mention that I couldn’t find this information on dune analytics, but the APY rates have been pretty high compared to the rest of the market for quite some time (or at least the past few months):
Cons: This strategy is also on mainnet so be careful of gas fees, making this one only profitable if you’re moving large amounts (like Tetranode certainly does).
Conclusion:
Similar to the Merge that occurred last Fall, the upcoming Shanghai upgrade (speculated to occur sometime towards the end of Q1 2023) might cause a significant amount of price disruption as there might be a huge unlock of $ETH in the open market. Regardless if we zoom out far enough, in my opinion I’m super bullish about $ETH’s prospects for the future.
Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Have fun everyone!