EigenLayer Airdrop Strategy IV: Leverage Farming on Steroids with Pendle’s YT-eETH
Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
Each week, I think I’ve finally exasperated all strategies for the EigenLayer airdrop (rumored to be in the second half of 2024) but then I stumble upon yet another killer idea.
This will be a summary of the YT-eETH strategy outlined by the Twitter account Pendle Intern on January 12, 2024, which explains why buying and holding YT-eETH or at least LP’ing in the eETH Pool on Pendle might earn us a mega airdrop from EigenLayer and ether.fi.
Previously we covered the EigenLayer caps raise in December 2023, which led to a mania of restaking 9 LSTs. However, during this period new Liquid Restaking Tokens (LRTs) were launched by the teams at Kelp DAO, ether.fi, and Renzo.
rsETH by Kelp allowed ETHx and stETH holders to restake their LSTs and maintain their liquidity in a transferable utility token.
The bigger breakthrough was ether.fi’s eETH and Renzo’s ezETH, both of which allow users to directly deposit ETH and have it natively restaked in EigenLayer, in one transaction, and with no deposit limits.
Since the start of December, Renzo ezETH grew from $2.5M in ETH deposits to $116M as of this writing, while ether.fi grew from $50M to now $330M! Given the vast number of DeFi integrations for eETH (Curve, Balancer, Maverick, Gravita, Sommelier, Term Finance, and Pendle) eETH has grown larger in January, while there’s rapidly growing interest in ezETH which just recently made ezETH transferable.
To further accelerate interest in LRTs, Kelp, Renzo, and ether.fi all
Thank you, Defi Dad! Do you think it’s still profitable to buy YT-eETH now? Or is it too late?
It’s hard to say given how much liquidity is competing for EIGEN and etherfi’s token. No doubt it’s more capital efficient. Buying 1 ETH of YT-eETH expiring to $0 of value on Arb in 70 days gives you the equivalent farming of 17 eETH minted. Is it worth spending 1 ETH to farm 17 eETH of points for 70 days is what you have to consider? If one can afford to spend 1 ETH in this example to risk earning points, then it could be a great strategy. If that sounds expensive or wasteful, I would skip it and just zap into the Pendle LP with zero price impact and know you get your principal back when done farming. With YTs, you do NOT get your principal back.