Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we cover a looping strategy for LRTs, powered by Instadapp’s new flagship lending and borrowing protocol called Fluid.
Instadapp has long been a DeFi super tool–the ultimate hub for simplifying your DeFi journey and enjoying a safer, more accessible experience.
With Instadapp, you can leverage, refinance and migrate positions easily with built-in strategies, batching operations, and automation.
Today, Instadapp Pro, its legacy app, continues to manage nearly $3B across the most popular protocols in DeFi such as Maker, Aave, Compound, Liquity, Morpho, Spark, Curve, and Uniswap. Instadapp supports DeFi super-users across Ethereum Mainnet, Arbitrum, Optimism, Polygon, Avalanche, Base, and Fantom.
After 2 years of development, the cofounders of Instadapp launched Fluid, an advanced DeFi lending and borrowing platform offering high loan-to-value ratios, innovative liquidation mechanisms, and features like smart debt and collateral.
In summary, Fluid is what you get when 2 genius DeFi developers decide to design their own lending and borrowing protocol having done years of deep integrations for every major protocol, in order to ship a more secure, capital-efficient, and user-friendly DeFi experience.
Fluid is still in the early stages of its Ethereum Mainnet launch which kicked off in late February 2024, with a total market size today of $196M.
With Fluid, we can keep it simple and lend USDC, ETH, or USDT for the following rates.
Alternatively, we can borrow against this collateral with vaults and use all the powerful automation of Instadapp Pro within the Fluid interface including strategies to:
- Deposit & Borrow
- Payback & Withdraw
- Leverage
- Deleverage
Below is an example of a vault where users can borrow wstETH debt against weETH collateral.
By using this Leverage strategy, Instadapp automates borrowing wstETH, swapping wstETH for more weETH, and depositing weETH as collateral to create a leveraged position.
By automating the borrowing-swapping-deposting actions, users can achieve ~9x leverage in a few clicks, with a vault of 2 correlated assets, meaning they move up and down together in price, lessening the risk of liquidation.
I am not advising or recommending anyone open a 9x leveraged position, because a depeg in either asset below or increasing debt interest could blow up a position.
Today, I’ll show how I can use Fluid to lever up on weETH exposure and hence increase my ether.fi and EigenLayer points earned while collecting 3.3% APR in eETH staking yield.
How to Lever Up on EigenLayer & ether.fi Points with Instadapp’s Fluid Vaults
Before we get started, please be aware of these risks.
- Smart contract risk in Fluid
- Front-end spoof attack on any app frontend
- An economic design exploit
- Colluding signers on any multisig
- Market risk leading to a depeg in eETH or stETH could lead to a complete loss of funds
- Slashing risk with eETH or stETH
- Systemic risk if ever ether.fi is exploited
Here’s how I get started!
- First, I go to the Fluid app for this specific weETH/wstETH vault to Create Position.
- To open a vault, I need to first deposit weETH collateral so I click Deposit weETH, specify how much to deposit,…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
