💫Supernova - Powering LSDfi
Recursive yields with LSDfi
Last updated
Recursive yields with LSDfi
Last updated
2023 seems to be shaping up as the year of the LSD yield narrative. We believe that base layer LSD protocols and L2 LSD derivatives will grow to be one of the biggest catalysts and markets in 2023/24.
In fact, it already has. Liquid Staking overtook the DEXes category as the number 1 in terms of TVL within the DeFi category. (Source: DefiLlama)
Within the realm of LSD we see 2 distinct segments being:
Base layer LSD as protocols like Lido, Rocketpool, Stakewise
L2 LSD as projects that build on top of these base layerLSD protocols to boost additional yield, such as unshETH and fraxETH.
Our focus is firmly on the L2 LSD layer.
Our goal is to build easy-to-understand products catered to the LSD market that are strongly positioned for retail adoption in a bull market setting.
Parallax’s Meta-LSD Strategies will sit on top of L2 LSD protocols, combining:
Diverse revenue sources
Auto-compounding
Risk diversification
Additional yield with our platform revenue
$PLX token boost + Partner token boost
Parallax strives to provide safe and easy-to-use yield infrastructure for LSD assets by aggregating lucrative L2 LSD yields for individuals, DAOs and treasuries.
Supernova is a LSD Meta-Strategy consisting of more than 1 strategy in a vault. Think of it as an index approach for a basket of strategies, each with a customizable % allocation of your portfolio.
Parallax simplifies the process of investing in LSDs by allowing users to invest in one structured product. Our LSD Meta-Strategy let users gain exposure to LSD yields from multiple products all at once.
One meta-strategy (meta-vault) is a portfolio of several other strategies. By combining yield from multiple protocols with an additional boost from PLX yield, users can enjoy a higher APY than single-strategy depositors.
Let's look at how the Meta-LSD Strategy works with an example.
Armstrong wants to put his ETH to work. He knows that Lido offers a 4% yield, but he sees that there are some other protocols that offer way higher yields, like 20–30%. He doesn’t know which one to pick, but he knows he wants to get the maximum yield for his ETH.
🙇 Enter PLX MetaVaults 🙇
Armstrong deposits into one of several meta-LSD structured products.
Deposit any stablecoin
Swaps for base assets and deposit into 2–3 LSD protocols in one cheap gas optimization transaction
Auto-compound every several hours
Earns boosted with PLX rewards + L2 LSD tokens + platform fees
When Armstrong wants to buy his new lambo, he can one-click withdraw all assets from all strategies back into his stablecoin of choice.
Currently, we’re building:
unshETH — 19–30% APY
Instadapp — 7–8%
PLX — 15–20%
Average APY = (24.5 + 7.5 + 17.5) / 3 = 49.5 / 3 = 16.5% (lowest range)
Other protocols we will be incorporating by Q3 2023.
Balancer — wstEth-Eth
0xAcid — ACID
Yearn — yETH
Frax — frxETH
Lido —stETH
RocketPool — rETH
Ankr — ankrETH
Stakewise — sETH
You can read more in details here.
Supernova v2 will be an algorithmic strategy that combines Andromeda with LSD products and leverage (v2) into a recursive strategy.
Essentially, v2 allows users to earn staking rewards on their cryptocurrency holdings while also using them as collateral to take out loans or trade on margin with leverage. By applying leverage, users can experience a larger upside but will also face larger losses.
You will be able to stake more LSDs and supercharge your yields. Our LSD Meta Strategy involves recursively borrowing (v2) using network tokens against a base asset, staking them and receiving LSDs (i.e. stETH).
More information about Supernova v2 will be shared later.
