1/ If you’re a $GLP RealYieldooor & you’re not using a delta neutral strategy
Your gains are at risk. Unnecessarily.
Protocols now offer automated strategies to offset GLP’s inherent risks & the APRs are just as remunerative.
A 🧵 on how to earn risk-minimized #RealYield
Your gains are at risk. Unnecessarily.
Protocols now offer automated strategies to offset GLP’s inherent risks & the APRs are just as remunerative.
A 🧵 on how to earn risk-minimized #RealYield
2/ First, a recap of how $GLP works and why delta neutrality is a big deal.
4/ Although the token design of $GLP has been historically lucrative (25% - 40% #realyield APR), it exposes holders/stakers to the volatility of its underlying assets.
This is where delta neutral strategies come into play.
This is where delta neutral strategies come into play.
5/ In the context of $GLP, delta neutrality can be achieved by offsetting the price risk of underlying assets with a corresponding short position or through hedging on @AaveAave.
6/ Protocols are now building on top of $GLP, creating innovative, fully automated strategies for users to earn yield depending on their risk appetite.
These three stand out:
@gmdprotocol
@umamifinance
@ragetrade
These three stand out:
@gmdprotocol
@umamifinance
@ragetrade
7/ First up - @gmdprotocol
#GMD is a yield optimizing & aggregating platform on @GMX_IO. They utilize vaults that mimics GLP’s composition, which allows users to farm a portion of $GLP rewards through a single sided deposit
#GMD is a yield optimizing & aggregating platform on @GMX_IO. They utilize vaults that mimics GLP’s composition, which allows users to farm a portion of $GLP rewards through a single sided deposit
8/ You can deposit $USDC, $ETH, or $BTC and receive gmdUSDC/gmdETH/gmdBTC in return.
#GMD uses these deposits to mint $GLP.
#GMD uses these deposits to mint $GLP.
9/ The supply cap of each asset resemble the ideal asset mix of $GLP, & the protocol incentivizes rebalances through dynamically adjusting deposit fees (similar to mint/burn GLP)
10/ In other words, you can earn a portion of $GLP yields without having to directly convert your assets into GLP!
11/ @GMDprotocol currently pays
~16% on $USDC
~13% on $ETH
~13% on $BTC
When entered a position, users receive gmdTokens which appreciate in value against the underlying assets.
~16% on $USDC
~13% on $ETH
~13% on $BTC
When entered a position, users receive gmdTokens which appreciate in value against the underlying assets.
12/ $USDC, $BTC & $ETH vaults have reached maximum capacity, but you can soon buy gmdUSDC/gmdBTC/gmdETH directly on Uniswap v3.
The team has also indicated that vault limits will be increased for more deposits over time as the team monitors vault performance and yield.
The team has also indicated that vault limits will be increased for more deposits over time as the team monitors vault performance and yield.
13/ Next Up is @UmamiFinance
Umami is another yield optimizer built on @Arbitrum, and they recently announced a $USDC vault which will utilize @GMX_IO and @TracerDAO
Umami is another yield optimizer built on @Arbitrum, and they recently announced a $USDC vault which will utilize @GMX_IO and @TracerDAO
14/ You can deposit $USDC into the vault and receive usdGLP, a tradable receipt token. That $USDC is then split into two portions:
(i) To mint $GLP and earn GLP rewards
(ii) To hedge out the $BTC / $ETH exposure in GLP with shorts
(i) To mint $GLP and earn GLP rewards
(ii) To hedge out the $BTC / $ETH exposure in GLP with shorts
15/ $ETH rewards from $GLP and $TCR rewards from hedges are converted back to $USDC and paid out to depositors.
The vault is rebalanced daily, and targets ~0 market exposure - perfect for a bear market.
The vault is rebalanced daily, and targets ~0 market exposure - perfect for a bear market.
16/ Backtested results suggest 20+% APR in $USDC, with ZERO market exposure.
Very impressive.
Very impressive.
17/ V2 vaults are set to release in Q4 2022, alongside other exciting products.
Keep your eye on @umamifinance. It is touted by quite a number of #DeFi OGs.
Keep your eye on @umamifinance. It is touted by quite a number of #DeFi OGs.
18/ Last but not least, @RageTrade
Rage is building an on-chain ETH-perp, as well as a stablecoin farm, utilizing – you guessed it, @GMX_IO
Rage is building an on-chain ETH-perp, as well as a stablecoin farm, utilizing – you guessed it, @GMX_IO
19/ Rage offers two forms of delta-neutral stablecoin farms utilizing $GLP:
Risk-off vaults: low risk delta-neutral strategy
Risk-on vaults: more yield for the degens out there
Risk-off vaults: low risk delta-neutral strategy
Risk-on vaults: more yield for the degens out there
22/
(iv) Create short position on Aave by borrowing ETH+BTC against USDC collateral
(v) Repay flash loan on @Balancer
(iv) Create short position on Aave by borrowing ETH+BTC against USDC collateral
(v) Repay flash loan on @Balancer
23/ Backtested data is showing ~20-25% APR.
This is certainly a riskier strategy compared to others I’ve listed today, so be sure to DYOR and check out their docs:
docs.rage.trade
This is certainly a riskier strategy compared to others I’ve listed today, so be sure to DYOR and check out their docs:
docs.rage.trade
24/ The Risk-Off Vault is a low risk USDC lending vault.
It lends USDC to the Risk-On Vault which uses the $USDC to short the $ETH &$ BTC exposure in GLP.
It earns lending interest, as well as a portion of the $GLP yields from the risk on vault
It lends USDC to the Risk-On Vault which uses the $USDC to short the $ETH &$ BTC exposure in GLP.
It earns lending interest, as well as a portion of the $GLP yields from the risk on vault
25/ Risk is much lower here, and from backtested data we can expect ~6-8% APR
26/ Delta Neutral GLP Vaults will be launching Dec 12
Keep @ragetrade on your radar as well. ~25% #realyield on stables is no joke.
Keep @ragetrade on your radar as well. ~25% #realyield on stables is no joke.
27/ Here’s a list of threadooooors you should follow:
@rektdiomedes
@ViktorDefi
@safetyth1rd
@DefiIgnas
@OnChainWizard
@defi_mochi
@ThorHartvigsen
@milesdeutscher
@the_advisor_btc
@VentureCoinist
@0xCrypto_doctor
@crypthoem
@Dynamo_Patrick
@TheDeFinvestor
@JackNiewold
@alpha_pls
@rektdiomedes
@ViktorDefi
@safetyth1rd
@DefiIgnas
@OnChainWizard
@defi_mochi
@ThorHartvigsen
@milesdeutscher
@the_advisor_btc
@VentureCoinist
@0xCrypto_doctor
@crypthoem
@Dynamo_Patrick
@TheDeFinvestor
@JackNiewold
@alpha_pls
28/ In addition, I'm proud to announce that I’m working with @defi_mochi on a comprehensive research deck on @GMX_IO that covers the full protocol architecture, metrics & yield strategies of @UmamiFinance, @GMDprotocol & @rage_trade.
Look out for that!
Look out for that!
29/ Like RT & follow if you enjoy my content.
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