gETH for Dummies: A Beginner’s Guide to Best Understand and Utilize GND’s LSD Asset
We recently introduced our latest products - gETH and sgETH - with a detailed article that explained clearly all the inner working mechanisms of gETH.
However, for a product as versatile as gETH, our intended use cases range from the most sophisticated institutions to retail traders who are only beginners in the world of DeFi. As such, the technical-heavy terms might be unnecessary for our users who are newly-introduced to DeFi in general and LSDs specifically.
To accommodate that need, here we are with this article as a simple and accessible, yet thorough guideline.
1. What are gETH and sgETH?
- gETH is a derivative of LSD tokens. gETH will be minted by using several LSDs and ETH derivatives as collaterals. The intrinsic value of 1 gETH will be equal to 1 ETH.
- sgETH is simply the staked version of gETH. The intrinsic value of sgETH will be yield-bearing and will increase over time in comparison to ETH (ie. 1 sgETH = 1.2534 ETH in the future)
2. How to get gETH and sgETH?
gETH can be minted and redeemed into and out of any tokens (with a small dynamic fee) including:
- wstETH
- rETH
- gmdETH
- sfrxETH
- WETH and ETH
- and more potential LSDs can be considered….
=> sgETH can be earned simply by staking the existing gETH.
3. How to earn with gETH and sgETH?
There are 3 main earning strategies for users to earn yields from gETH:
- Stake their gETH and receive sgETH and earn a part of the LSD yield. sgETH will be yield-bearing, for example, after one year of 10% APR, sgETH will be worth 1.1 ETH.
- Farm gETH LP pairs, which will be rewarded with xGND and GND on GND Farm (provided on GND Protocol’s website).
- Additional earning strategy with future partnered Liquity forks will be announced soon with thorough guidelines.
4. What else can you do with gETH?
We also introduced some groundbreaking features for gETH pool:
- Non-gETH holders are enabled to swap between LSD products by using a high-liquidity pool of LSDs.
- Users are also enabled to mint directly on Ethereum to receive gETH on Arbitrum and vice-versa
5. What are the underlying fees you need to know?
To maintain the system, there are some small fees that we collect that users need to be aware of:
- Minting/Redeeming Fees: Users will be charged 0–0.35% for minting and redeeming gETH. The exact rate will be determined based on the weight of the collateral.
- AMM Swap Fees: Users will be charged a competitive fee to exchange among LSD products or into ETH in the gETH pool.
- Cross-Chain Fees: 0.2% cross-chain minting fee will also be applied.