[Temperature Check] Yearn yETH Product Integrations

[omgcorn]

[Temperature Check] Yearn yETH Product Integrations

About

This is a proposal authored by Corn of Yearn to integrate st-yETH into kETH and other relevant Blockswap projects.

Yearn is DeFi’s premier yield aggregator, providing individuals, DAOs, and other protocols with a platform to deposit digital assets and earn yield. Launched in the summer of 2020, Yearn quickly gained recognition for the best risk-adjusted returns in DeFi with over $6 billion in deposits.

Yearn recently launched Vaults v3, which brings better automation, flexibility and composibility to its core Vault offering and gives DeFi builders the tools they need to create permissionless yield strategies.

Yearn leverages its yield expertise with a range of yield boosted tokens like yETH, yCRV and yPRISMA.

The Yearn DAO has demonstrated its expertise in risk management and strategy creation at various global events, including ETHCC, ETHDenver, ETHDubai, ETHAmsterdam, and The Stanford Security Summit. Yearn also contributes as a whitehat to SEAL 911, a first response security team developed by samczsun.

Yearn is maintained by a team of full and part-time contributors and is governed by the YFI token.

Introduction to yETH

yETH is a user-governed liquidity pool token consisting of various Ethereum Liquid Staking Derivatives (LSTs).

The yETH protocol is an Automated Market Maker (AMM) for LSTs. Each LST in the yETH pool is priced according to the amount of beacon chain ETH it represents. This lets users deposit their LSTs into the pool and receive yETH tokens pegged 1:1 with beacon chain ETH. Users can also stake their yETH tokens to mint st-yETH, accrue yield, and participate in yETH governance.

This AMM model, combined with the governance and incentive mechanisms of the yETH protocol, aims to provide an optimal risk-adjusted yield for ETH staking by dynamically adjusting the weights of the LSTs in the pool. It also offers users flexibility with single-sided deposits and withdrawals, and maintains the pool’s balance and diversification through a weight management system.

The yETH protocol is governed by its users who can vote to adjust the weights of the LSTs in the pool, helping to maximize yield and mitigate risks associated with individual LSTs.

All yields generated by yETH go to Staked yETH (st-yETH) holders, making yETH an ideal token for Liquidity Providing in stableswap pools like those on Curve. To acquire yETH, users can mint yETH by depositing LSTs or swap against the yETH/ETH Curve pool.

Rational

yETH combines yield of underlying LST’s, trading fees, and incentives into a single yield bearing token. yETH naturally spreads risk amongst multiple projects while yielding a higher APY than holding any particular individual LST.

st-yETH’s 30 day average APY is 4.39% at $12.54M TVL.

Proposal

We propose using the yield-bearing st-yETH in Blockswap products to provide competitive yield with an additional layer of safety through diversification.

Conclusion

This temperature check is open to feedback and discussion with the broader community.

[Cryptolife]

Let’s go for it. The more we integrate the better.

[Kentphilly]

I like it, @omgcorn - what do you need from the DAO to push this forward? Thanks for bringing this to us, I want to help push this forward.

[LootyBooty]

Thanks for reaching out! How wonderful to hear from Yearn itself. Let’s do this!

[Kentphilly]

Thanks to Corn for suggesting this new partnership with Ajna, built on top of Yearn.

TLDR: Yearn proposal to add dETH/WETH pool on Juiced (Ajna) with AJNA incentives on top of BSN incentives is opportunity for Blockswap DAO.

The Grants Council believes we should catch this opportunity. We are going to offer up 250k BSN per week in incentives for 4 weeks = 1m BSN in total for this initiative.