💬 Introduction

As we strive to deploy the best possible optimised buying strategy during the bear market, (described here: DCA / Accumulation Strategy), one essential pillar to our fund is the yield we earn on our entire balance sheet.

This yield will be our extra edge over what any DCA strategy can provide:

• USD yield: gives us extra dry-powder for better purchases (more size and chances);
• ETH yield: further Ether accumulation.

We define this productive balance sheet as the Yield Layer subcategorised as follows:

• Capital Efficiency:

  • 🤖 Liquidity Provisions;
  • 💵 Collateralised Debt Positions.

• Asset-Specific:

  • 💧 Liquid Staking;
  • ⚖️ Others.

🎰 Capital Efficiency

Under this category, we list two essential tools that earn yield and purchase Ether efficiently at the same time.

• Collateralised Debt Position (CDPs) & Money Markets - MakerDAO, Liquity & AAVE.

  • Estimated returns: 1-4% APR in USD for extra ETH buying due to efficient capital deployment.

  • By leveraging CDPs and Money Markets functionalities, it is possible to safely borrow inexpensive capital by freeing excess reserves to maximise cash flow. Freed reserves can up the revenue stream by a few extra percentage points. For more details see our page below ⬇️.

    ETH CDP Productivity

• Liquidity Provision:

  • Estimated returns: 10-30% APR (Trading Fees and Liquidity Mining programs)
  • By pairing Ether with stablecoins, we can build liquidity provision positions that act like Market Makers in Constant Function Market Maker Protocols (CFMMs) and enjoy the trading fee revenue from swaps:
    • The standard 50:50 liquidity disposition that Uniswap V2 offers provides downside protection through a constant dollar cost averaging departing from stablecoins to build up the ETH position. The inverse also happens - constant take profit departing from the volatile asset to build up the stablecoin position. This feature is known as impermanent loss - a feature, not a bug when used correctly. These positions dynamically adjust themselves throughout the price ranges.
  • In addition, most AMM protocols rent the liquidity by doing liquidity mining programs. By enrolling them, we can have additional rewards to further weather drawdowns and also to boost the upside when the volatile assets increase in price.
  • Read more on it ⬇️
    • Guillaume Lambert
    • Yielding while accumulating ETH

🧠 Asset-Specific

Crypto markets are infamous for providing opportunities that derive from information asymmetry and misunderstood fundamentals. By capitalising on momentum, arbitrage opportunities and asset mispricing, we can generate extra returns that will further compound the investment.

• ETH2.0 Bonds Arbitrage & Liquid Staking derivatives - Lido, Rocket Pool, Binance, Kraken, etc. (~4% APR)

  • Liquid Staking derivatives not only enjoy an in-kind 4% APR but also face a duration induced mispricing, meaning that they trade at a discount of about 6-8%. As The Merge ensues, this arbitrage will close and we intend on capitalise on it. For more details see our page below ⬇️.

    ETH 2.0 Staking Bonds