… out the DAI from the CDP via dYdX protocol at 8%, funding leveraged long contracts for users minting LETH positions. This earns you 5.5% APR net interest on DAI. However, if the ETH collateral value falls below 150% of the dollar value of the DAI borrowed, the CDP could be liquidated. This starts the auction process in which the ETH collateral of the CDP are sold in order to pay off the outstanding DAI loan balance, stability fees, and liquidation penalty (13% of CDP collateral). Adjusting for a collateralization ratio of 200%, this trade nets you only 2.75% APR, flat to 3m LIBOR.