Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we cover a simple automated DeFi vault for earning 20% APY with eETH by ether.fi.
In the last 24 hours, we received the official announcement for the EIGEN airdrop and it has come with mixed emotions. Whether you’re excited, disappointed, happy, or even confused by the details of the upcoming token by EigenLayer, there’s still endless real yield to earn. Not points. Not speculative airdrops, but real yield denominated in liquid blue chip tokens such as ETH, SOL, BTC, and stablecoins.
In the spirit of keeping it simple, I am spotlighting ether.fi’s flagship DeFi vault for eETH called Liquid, earning a whopping 20% APY in eETH. As DeFi integrations for LRTs grow, it can become increasingly challenging for LRT holders to keep up with the best opportunities.
To solve for this pain point, ether.fi launched Liquid vaults–automated DeFi strategies that provide eETH holders a simple access point to earn with eETH in DeFi. Liquid vaults will always add new integrations for eETH over time, ensuring vaults stay competitive in a rapidly evolving DeFi market.
Here’s how Liquid works:
- Deposit: Users just deposit wETH, eETH, or weETH in any quantity.
- Rebalance: Behind the scenes, the vault allocates across a variety of DeFi positions, including Aave, Morpho, Pendle, Balancer, Aura, Uniswap V3, and Convex.
- Earn: In the end, users enjoy auto-compounding yield, diversified eETH DeFi exposure, time and effort saved from having to run these strategies, and gas savings.
According to ether.fi docs, the strategy provider for this eETH Liquid vault is an institutional investor who deploys capital at scale called Seven Seas. They provide liquidity by fulfilling withdrawals.
Also, at the time of this writing, ether.fi is rewarding a 3x boost for any TVL deposited in Liquid–so users earn 3x ether.fi points with eETH in a Liquid vault vs just holding eETH.
Today, I’ll cover how I can get started earning the 20% APY in ether.fi’s eETH Yield Liquid vault.
How to Earn 20% APY with eETH in Liquid Vaults
Before we get started, please be aware of these risks.
- Smart contract risk in ether.fi and any integrated DeFi protocol
- Front-end spoof attack on the app frontend
- Oracle risks
- An economic design exploit
- Colluding signers on any multisig
- Impermanent loss in an underlying Liquid LP
- Market risk leading to a depeg in eETH could lead to a loss of funds
- Slashing risk with eETH
- Systemic risk in DeFi
Here’s how I get started!
- First, if I need eETH or weETH, I can go here to the ether.fi app under Stake, connect my Ethereum wallet, specify how much ETH to restake as eETH, and follow prompts to Stake. The referral link above gets 100 points per 0.1 ETH staked but if you prefer staking without this bonus, go here.
- With my wETH, eETH, or weETH, I then click to the Liquid tab -> ETH Yield -> Deposit Now -> Deposit.
- Lastly, I specify depositing whichever asset I hold and then follow the prompts to click Approve + Deposit.
That’s it! I can passively earn 20% APY + 3.21% APY in staking yield with eETH in Liquid, plus collect my 3x ether.fi points until Season 2 ends at the end of June 2024. I can withdraw here in the future, but it takes 72…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
