DeFi
DeFi protocol Sommelier introduced the launch of a brand new ETH liquid staking token vault known as Actual Yield ETH on Wednesday.
Actual Yield ETH is the brainchild of technique supplier Seven Seas Capital and Web3 knowledge analytics agency DeFine Logic Labs.
The vault is designed to generate yields on liquid staking tokens together with rETH, stETH and cbETH by means of two main strategies: leveraged staking on Aave and Compound, and offering liquidity on Uniswap V3. The protocol is anticipated to make extra tokens out there on Actual Yield ETH sooner or later.
“The unique foundational thought behind actual yield ETH was having an index of the very best yield on ETH,” Stephen Henkel, the CEO of Outline Logic Labs, instructed Blockworks.
Present index tokens peg their holders to the validation yield and are depending on how a lot fee validators or the protocols are taking, Henkel mentioned.
Within the case of Actual Yield ETH, which is taken into account a yield-weighted index, the extra yield a specific technique can obtain, the extra it is going to take from that index.
“As a method reaches its delicate cap of TVL, the incoming TVL can go into different methods, so it’s repeatedly weighed in such a approach that it may well absorb an increasing number of TVL,” Henkel mentioned.
Though Actual Yield ETH is constructed on high of Sommelier — which is a part of the Cosmos IBC, it’s an ERC-4626 vault and can dwell on the Ethereum blockchain.
Sommelier helps these distinctive methods come to life because the know-how allows “Uniswap V3 tick optimization, actually tight leverage loops and taking a number of positions throughout a number of property and protocols,” Solar Raghupathi, the co-founder and CEO of Seven Seas, instructed Blockworks.
Blockworks Analysis Analyst David Rodriguez notes that “Sommelier’s technique of leveraging an app-chain to optimize the Ethereum DeFi expertise that provides non-custodial, institutional-grade mid-frequency methods that change with on-chain market situations is a 0 to 1 enchancment on yield aggregation protocols like Yearn Finance.”
“Based mostly on (unofficial) backtested fashions, RealYieldETH ought to be capable to scale to over $60M TVL whereas offering ~13%+ APY with out liquidity incentives,” Rodriguez mentioned. “That is >2x yield than the following competing ETH-based yield alternative provided by Frax’s sfrxETH product.”
