Original author: 2Lambroz

Original source: X

Compiled by: Deep Wave TechFlow

Earn 141% on dYdX!

Or earn 125% by hedging on perpetual contracts + 12% delta neutral liquidity staking to earn $DYDX

A step-by-step guide to discovering LSD benefits on Cosmos

As DYDX AppChain, $TIA, and $DYM gain more attention, why not know more about Cosmos Liquidity Staking?

Summary

pSTAKE Finance is a liquidity staking protocol focusing on cosmo assets.

I have been exploring because more attention has come to Cosmos on the DYDX application chain, $TIA and $DYM, and I have discovered some good revenue models!

I will introduce step by step how to get 125% profit on dydx and stkdydx on pSTAKE Finance.

What is Persistence and Liquidity Staking

Persistence is Cosmos’ liquid staking protocol.

Liquid staking is the tokenization of pledged asset positions, allowing users to maintain liquidity while earning income.

For example, if you were to stake $DYDX, you would have to wait 30 days before you can unstake and redeem your position.

But if you stake via persistence, your staked DYDX position will be stkDYDX, the tokenized position of that staked position.

Simply put, it is to earn staking income while maintaining liquidity.

This enables:

  • No need to wait 30 days to exit your pledged position and sell your stkDYDX directly

  • Offer LP and earn DYDX/stkDYDX trading fees

  • If there is a discount on stkDYDX (not 1:1 with dydx), you can buy stkDYDX and unstake it for 30 days to earn the difference

Persistence has a range of liquid staking options, but I’m focusing on $DYDX as its yield is currently the best.

Persistance is the parent company of Pstake Finance and Dexter, a dex for staking assets.

Strategy description

  • Pledge 1/2 of your DYDX to stkDYDX

  • Earn 125% APR by offering LP on Dexter

  • Optional: Short dydx on CEX to earn an additional 12% APR and remain delta neutral

Here are the detailed steps:

1. If you only have assets on EVM, you can use @CCTPMoney to transfer funds to the Cosmo chain, the route must be EVM -> Noble -> Persistence

If not, you can use CEX to send funds to XPRT and then exchange to DYDX in Dexter

2. If you use CCTP funds, you currently hold USDC, buy DYDX on Dexter, click here to enter the website.

3. Pledge half of your DYDX liquidity to stkDYDX

4. Add liquidity on Dexter and bond to earn 141% annual interest rate in 7 days

Binding means you need to lock the position for 7 days to get additional emission $xprt yield (annual interest rate 125.78%)

What if you're worried that the price of DYDX might drop?

Hedge it! Also known as delta neutral strategy.

Let's say I have 250 DYDX and 250 stkDYDX in LP, which means I have 500 DYDX price exposure.

So if I also short 500 DYDX on CEX, this means my DYDX price exposure is 0 because I am simultaneously holding 500 DYDX and shorting 500 DYDX!

In fact because the funding rate has always been positive, your short position will also receive a payment subsidy (if the funding rate remains the same).

It’s also interesting to note that $STARS from @StargazeZone’s cosmo NFT chain (the chain where badkids NFT is located) is proposed as one of the liquid staking assets, which may bring some benefits.

Summarize

  • If you already hold it, the liquidity staking income on DYDX is good

  • Delta neutral mining is possible

  • You might as well go and learn more about LST

  • It’s always good to keep an eye on the persistence ecosystem, cosmos SDK assets are getting a lot of attention recently, $TIA $DYM, etc.