- Users can take advantage of the best DeFi experience to improve their staking yields
- It's easy to manage risk for each individual position on Oasis
Oasis.app, a DeFi platform that helps users get the most out of their assets, has announced the launch of an Aave StETH/ETH Earn strategy allowing users to increase their exposure to Lido’s Staked ETH yield token, Bankless Times learned from a press release.
Oasis users will now be able to enter this strategy with ETH and take advantage of the best DeFi experience to improve their staking yields while continuing to manage their risk.
Borrow against liquid Lido Staked ETH
This new strategy enables users to use the Aave Protocol to borrow ETH against liquid Lido Staked ETH (StETH) and purchase additional StETH with it, increasing their exposure to the yield offered by staking.
Lido Staked ETH is the most used liquid staking derivative in the market today, and Oasis is pleased to offer this as its first Staked ETH Earn strategy.
Users who come to Oasis with ETH can open a StETH Earn Strategy in a single transaction by simply choosing the strategy from the Earn section, entering the amount of ETH they wish to deposit and selecting their relevant risk exposure, i.e. times two.
Increase yield beyond holding Staked ETH
Although this strategy offers users the opportunity to increase their yield beyond just holding Staked ETH, it does expose the user to some additional risk.
To get this additional yield, the client has to borrow ETH on the Aave markets, and although it is expected that the borrow rate is to be less than the Staked ETH rate, it isn’t guaranteed. If this rate exceeds the Staked yield, as it did just prior to the merge, it can lead to the position losing value in ETH terms.
Likewise, the strategy assumes Staked ETH will be very close to 1:1 peg of ETH. If the value of Staked ETH to ETH drops, again as it did prior to the merge, this can lead to loss of value if the client does not exit the position.
A significant reduction of risk
Both of these risks are greatly reduced since the successful merge of the Ethereum network. Users should note however, that because this is a multiplied position, there is always the risk of liquidation, and users should manage their risk accordingly. This is easy to do for each individual position on Oasis.
Oasis CEO Chris Bradbury said:
At Oasis, our mission is to build the most trusted place to manage your capital in DeFi. Because of this, we decided to take a cautious approach and wait for the Merge, due to expected large amounts of volatility with StETH leading up to the event and the risk in the success of the fork. Now that we see the success of Ethereum Proof of Stake we believe now is the perfect time to launch this new strategy on Oasis where risk to users taking on losses, or being liquidated, is greatly reduced.
Stani Kulechov, Founder and CEO of Aave Companies, added:
There is strong interest in using StEth to earn additional yield without taking on excessive risk. We are excited to be the first to enable the StEth Earn Strategy on Oasis. Through this expansion, the Aave protocol will enable users to borrow assets against their StEth while retaining their Ethereum staking rewards.
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