The goal of this forum post is to discuss the upcoming Cellar proposal asking Governance to accept the Real Yield ETH strategy. The proposal will go to vote on Friday, April 7, 2023.
Real Yield USD has proven to be the a highly effective strategy on Sommelier, showcasing the platform’s technical superiority for DeFi vaults. Building upon this achievement, Seven Seas has partnered with DeFine Logic Labs, a data science firm with extensive DeFi knowledge, to develop Real Yield ETH.
The Real Yield ETH Strategy is an optimized method aimed at enhancing ETH returns by capitalizing on the opportunities presented by leveraged staking and liquidity provisioning (LPing) on Uniswap V3. This strategy employs various Liquid Staking Tokens (LSTs), such as cbETH, rETH, and stETH, with plans to incorporate more options like wstETH in the future.
- Aave V2
- Aave V3
- Uniswap V3
The strategy generates returns through two primary techniques:
- Leveraged Staking: This process involves continuously exchanging ETH for an LST, using the LST as collateral, borrowing additional ETH, and repeating the cycle. Sommelier’s innovative architecture allows for tight loops and close monitoring of on-chain conditions to reduce liquidation risk. Furthermore, the Cellar contract enforces a minimum 1.05 health factor during each rebalance as a safety precaution.
- Uniswap V3 LPing for ETH/LST Pairs: Mirroring the Real Yield USD strategy, this method entails providing liquidity to ETH/LST trading pairs on Uniswap V3, a leading decentralized exchange. Liquidity providers deposit both ETH and an LST into a liquidity pool and earn fees from traders exchanging between the two tokens.
The anticipated APY is approximately 15%. As more LSTs are supported, the APY is expected to increase.
Proposal for cellar authorization for strategy Real Yield ETH
If approved, the chain will accept signed function calls submitted to the cellar contract from the strategy provider.
Name: Real Yield ETH
Cellar share token: YieldETH
Platform fee: 2% (1.5% for strategy provider + 0.5% for protocol)
Performance fee: 20% (15% for strategy provider, 5% for protocol)
Strategy providers: Seven Seas Capital and DeFine Logic Labs
We will update this post with more details in the coming days, including contract deployments and relevant content.