Derivatives decentralized exchange (DEX) Lyra announced it has partnered with Ethena Labs, a protocol focusing on the yield-bearing USDe stablecoin to offer users increased exposure to ETH gains without the risk of initial capital. The strategy enables users to earn 2.5 times the sUSDe yield during ETH price increases and maintain the sUSDe yield when ETH prices remain stable.
This strategy involves purchasing bull call spreads using the sUSDe yield from the previous week, providing leveraged exposure to ETH based on user yields. It is particularly effective in bullish market conditions.
A bull call spread is a straightforward trading strategy comprising two elements: a long call with a strike price of K1 and a short call with a strike price of K2, where K2 is higher than K1. The maximum profit potential for a bull call spread equals the difference between the two strike prices (K2 – K1), realized if the asset price is at or above K2 upon expiration.
It provides depositors with LDX Points, increases Sats earned per day by fivefold, and includes an automated options strategy designed to potentially increase users’ sUSDe weekly earnings by 2.5 times while maintaining yield stability during sideways market conditions.
Furthermore, according to Lyra, the strategy is beneficial for sUSDe holders optimistic about ETH and seeking upside potential without exposure to downside risks. It generates higher yields in bullish market conditions and either reduced or no yields in bearish markets.
Ethena Labs focuses on the development of USDe, an Ethereum-based stablecoin collateralized by derivatives. This method aims to maintain a balanced return profile denominated in US dollars, mitigating potential losses or gains from either position. sUSDe is the staked variant of USDe.
You have $10,000 sUSDe earning 17% APY.
You buy a $3,400 ETH call for $165, sell a $3,600 call for $70.
The cost is $95, max payout is $200 if ETH hits $3,600.
If ETH is $3,500, payout is $100.
If ETH drops by $100+, no yield for that week.
— Lyra (@lyrafinance) July 9, 2024
What Is Lyra?
Lyra is a comprehensive derivatives DEX offering options and perpetuals trading with features such as cross-asset collateral, cross-margin, portfolio margin, and the capability of self-custody. The platform operates with the LDX token, serving as both the utility token for the Lyra Protocol and Layer 2. LDX also facilitates governance of the Lyra DAO and promotes alignment of interests among diverse stakeholders.
Recently, Lyra has collaborated with Privy to enhance its onboarding experience, streamlining wallet access through email, social media, and passkey logins. The new integration merges Privy’s authentication suite with account abstraction and session keys, allowing users to link an email address, Google account, or passkey to their external or embedded wallets. This enables trading directly in the browser without the need to manually sign transactions.
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