One of the best and most reliable ways to earn yield on ETH is through staking it on ETH2. Over the last year, there has been a wave of new DeFi projects building staking derivatives, meaning users can own tokens that represent their staked ETH — allowing them to use their staked ETH across DeFi. The market leader here is Lido and their stETH, which has over $6 billion of ETH staked.
Today, we are announcing our latest Ribbon Vault the stETH Covered Call vault — a high yield product which allows users to earn yield on both Option yield and Staking yield at the same time.
How it works
The mechanics behind the vault is simple. Users can deposit ETH, and the Ribbon Vault will automatically stake the ETH with Lido and get back stETH. The vault will then use the stETH as collateral for writing call options against it, generating stacking both sources of yield.
On the flipside, when users want to withdraw their ETH from Ribbon, the vault automatically swaps stETH into ETH on the Curve stETH pool, which has extremely deep liquidity.
We will soon rollout the ability to deposit stETH directly and withdraw stETH directly if the user chooses, but the product will launch without this feature.
We will be launching this product next week, and are currently working with the Lido team to figure out how the Ribbon Vault can earn $LDO as part of the Lido Referral Program and pass it back to users.
To start, we will be capping the vault at 1000 ETH.
Connect With Us
To stay updated and be notified when the vault launches, follow us on Twitter and join our Discord!