Original author: Stephen, crypto KOL
Original translation by: Felix, PANews
Currently, sustainable and scalable ETH yields >20% are not common. Crypto KOL Stephen reviewed strategies that keep the annual rate (APR) above 20%.
wstETH
wstETH can be considered one of the most popular, competitive, and scalable strategies in history. Even in the lowest bear markets, the APR usually ranges from 8% to 30%.
The way wstETH works is by utilizing the staking yield of ETH (around 3%) to offset the cost of borrowing ETH (around 2%).
There are four excellent places to operate:
Morpho Labs
Aave
Compound Growth
Euler Labs
Currently, the APR of this strategy is between 26% and 46%. Of course, you can use Contango to automatically leverage these positions to generate TANGO points, OP emissions, etc.
Leveraged weETH
This strategy is similar to the previous one, but this strategy is also eligible for various points and emissions. Therefore, the average yield of this strategy is slightly higher:
ether.fi points
Veda points
LRT 2 points
EigenLayer programmatic rewards (like $LRT 2)
The three blue-chip money markets are the best places to leverage:
Compound Growth
Aave
Morpho Labs
Considering LRTsquared, EtherFi S 4, and Veda points, the APR ranges from 22% to 36%. The actual yield after considering points may exceed 50%.
Note: Although Morpho currently has the highest APR, the gap between the top three protocols is not significant, so hedging between them can often yield the most competitive and consistently high APR (hedging against unstable borrowing rates).
AERO mining
Compound Growth is currently paying users to borrow AERO against cbETH, ETH, and wstETH as collateral.
At the same time, you can earn about 200% APR on AERO through voting on Aerodrome.
Of course, the liquidation loan-to-value ratio (LLTV) is 65%, so let's look at some reasonable positions:
Loan-to-value ratio (LTV) 50%
Relative AERO liquidation increase: 30%
Total yield from ETH collateral: 100% APR
Loan-to-value ratio 25%
Relative AERO liquidation increase: 160%
Total yield from ETH collateral: 54% APR
ynETH
Spectra is a competitor to Pendle, and although it has recently generated some buzz with its USR pool, the ynETH pool it launched also offers certain market opportunities.
With 0 boost, the APR is 33%, and with boost, the APR can reach 100%.
It is worth noting that if Spectra becomes a real competitor, holding/locking SPECTRA may yield good results, so increasing some risk exposure for higher returns may not be bad.
gmETH
This strategy is somewhat controversial since gmETH has experienced principal loss.
gmETH is known as the 'Counter Party Vault'; when traders on GMX achieve excess returns, it tends to drop relative to ETH. The same is true in reverse, which has been the norm in the past.
You can implement this strategy on Dolomite, with the current annual rate around 30%, and the historical average annual rate around 20%.
GMWETH (Umami)
This strategy is very similar to the previous position, but it hedges most of the delta and risk.
While the current APR is around 16.5%, historically it has been quite high (around 50%), and in the mid-term future, the average APR will exceed 20%.
pufETH
Despite the recent increase in competition, pufETH has long been a goldmine. The historical APR of this LP (30 bps fee tier) has ranged between 15-50%, with very low rebalancing.
This is like a hidden gem, although it won't last forever.
Sustainable and scalable ETH yields >20% are not common.
You can find some smaller but still incredible opportunities at places like D 2 LFinance, but making them too public when it comes to smaller positions for smaller yields is self-deceptive.
