[FSVP-6] stETH Multistrategy Smart Vault w/ Looped Lido Leverage

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Gm Vaultcraft Community, Kenneth here, I am a Defi Protocol Relations contributor at Lido DAO. I am writing to propose a vault that utilises stETH and wstETH which are liquid staked tokens minted using the DAO’s smart contracts.

Smart Vault Details

Protocol Description:

Lido is the name of a family of open-source peer-to-system software tools deployed and functioning on the Ethereum and Polygon blockchain networks. Lido enables users to mint utility tokens that receive rewards for their validation activities on the blockchain that can be used for other on-chain activities such as providing collateral and borrowing.

Key Features of Lido:

  • stETH is ranked 6th in Crypto Marketcap and has deep liquidity across multiple DEXes
  • Can be canonically bridged to other networks such as Arbitrum, Optimism, ZKSync and more
  • Available in multiple lending markets such as Aave, Compound and Radiant with high LTVs

Strategy Description:

Use VaultCraft’s new multi-strategy Smart Vault infrastructure with exposure to stETH where strategies can be rebalanced from levered long stETH positions.

Repo for Multistrategy Smart Vault:

Strategies:

  1. LLL on wstETH - Looped Lido Leverage:
  • deposit wstETH
  • borrow ETH
  • wrap and redeposit as wstETH
  • vault deposits/lends wstETH into SPARK
  • yield per loop is leverage*stETH yield - ETH borrow rate
  1. wstETH on Idle, junior & senior
  2. wstETH on Compound
  3. wstETH on AAVE

Target Base Yield: 15%

Target oVCX Boost: Min 25% APY

Value proposition

Diversified exposure to long ETH yield on stETH that can be rebalanced easily and cost efficiently. This will incentivize new stETH holders as well as new liquidity providers for VaultCraft that can earn additional oVCX rewards and contributed to VCX Value Accrual.

Audits

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Is the idea to rebalance between the leveraged wstETH strategy and the other non-leveraged strategies on Idle, Aaave, and compound?

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Seems like Junior and Senior Amphor strategies on Idle are cooking right now. Will leverage offer higher returns?

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