Instadapp + Idle: Redefining Leveraged Yield for ETH LSDs
New Yield Tranches based on Instadapp iETH are here, unlocking boosted leveraged yield and liquidation protection starting from stETH
Idle DAO is excited to announce the release of new stETH YTs, marking the first-ever native integration on Instadapp Lite V2. These strategies merge Yield Tranches’ risk-adjusted capabilities with Instadapp’s exceptional above-market performances, propelling yield opportunities for stETH token holders to new heights.
Instadapp Lite and iETH V2 vault
With over $2b TVL and two years of activity, Instadapp is a full feature platform for both users and developers to leverage the full potential of DeFi. The Instadapp protocol — also known as the “Defi Smart Layer” (DSL) — acts as the middleware that aggregates multiple protocols into one upgradable smart contract layer.
Among this ecosystem, there’s Instadapp Lite: a set of smart contract vaults that leverage DSL to create profitable and automated DeFi yield strategies based on ETH LSDs and leading lending protocols.
Counting approximately $72M TVL, the iETH V2 represents the most established vault on the platform. This strategy takes ETH and stETH deposits and supplies them across lending protocols such as Aave, Lido, Compound, and Morpho, implementing automated rebalances to borrow ETH for more stETH.
This process allows the vault to achieve a leveraged position, resulting in reduced costs and amplified yields, as shown by this comparative graph:
As previously mentioned, the iETH V2 vault’s exceptional performance is a result of its strategic utilization of multiple protocols. However, this diversification also exposes the pool to inherent risks, including the possibility of liquidation and illiquidity impacting stETH.
Idle YTs emerge as a highly effective solution to proactively tackle these challenges.
New stETH Yield Tranches
Through this integration, Instadapp joins the Idle ecosystem as an underlying yield source for Yield Tranches. The first launched are stETH YTs, allowing Idle users to gain risk-adjusted exposure to Instadapp’s stETH V2 vault on the Lite dApp, currently boasting ~$72M TVL.
By depositing into new Senior and Junior stETH YTs, DeFi users can now take advantage of this opportunity while choosing the risk-return ratio that most aligns with their goals and needs:
- Junior YTs provide boosted returns, as they are rewarded with a greater share of the underlying yield in exchange for taking on potential losses;
- Senior YTs provide a lower APY but come with built-in protection on funds, given by the Junior Class’ deposits.
Here you can find a Yield Simulation Tool — you can change Senior/Junior liquidity to set up different scenarios to get a comprehensive overview of the APY performance offered by Instadapp stETH YTs under various scenarios.
Upon release, these strategies come with a guarded launch at a TVL cap of $1M. After further battle-testing and additional rigorous security reviews, the new Instadapp stETH YTs will be made available to anyone.
This conservative approach offers a unique opportunity for early adopters while ensuring a thorough assessment of security and performance as the strategies scale.
About Idle DAO
Idle DAO is a decentralized organization that builds yield automation infrastructure for DeFi. From brand new protocols to institutional and DAOs, businesses of every size use our product suite to optimize capital efficiency and manage their treasuries.
Everyone deserves the best for their idle funds in terms of returns and risks. Over the past four years, Idle has rolled out the features and services, defining and shaping the yield aggregation and risk tranching space. To learn more about our product suite:
