Seeking Yield by Staked— Issue #3
Tezos Amends Itself, ETH Arbitrage via CDP, MakerDAO Buyback and Burn, & Current Staking and Lending Yields
This is the third issue of Seeking Yield, a weekly update about the most interesting things happening in crypto asset staking and lending.
Tezos Amends Itself
Tezos is highly touted for its ability to amend the protocol via on-chain governance. While this is undoubtedly very fascinating, the network has yet to vote on anything.
A research and development shop has recently proposed two competing amendments to the Tezos protocol.
Amendment Proposal #1: Increase the gas limit
Amendment Proposal #2: Increase the gas limit and also reduce the roll size
We published this piece to provide context for the proposals based on our experience running a baking operation for the last nine months.
ETH Arbitrage via CDP
MakerDAO CDP 4492 recently saw some extremely curious and unusual action.
Making use of several frees and draws, the owner of CDP 4492 was able to push the CDP to liquidation and purchase ETH at a 3% discount.
In other words, this situation resulted in more than $38,000 of relatively risk-free arbitrage, given [3%] x [8,859.87 ETH] x [$145 / ETH].
Check out the original post on Twitter by Mike McDonald here.
MakerDAO Buyback and Burn
As nearly 2% of the ETH supply or more than $300M of ETH is locked up in MakerDAO smart contracts, the token economics of the platform have become a hot topic.
Let’s examine a few equations that elucidate the economics of MakerDAO.
DAI-denominated MKR burn rate = [DAI Market Cap] x [Stability Fee] x [Time]
MKR Burn rate = [[DAI Market Cap] x [Stability fee] x [Time]] / [MKR price in DAI]
A stability fee is taken from repaid Dai, which is used to automatically purchase Maker.
This stability fee becomes increasingly meaningful as the perpetual auction purchases more and more MKR from the market, resulting in less holders of MKR.
Ergo, it is the buyback and burn model that actually generates appreciation for MKR.
Give this piece by David Hoffman a read for more on this topic.
Current Staking Rewards
Sign up with Staked today and stake Decred (DCR), Tezos (XTZ), Dash (DASH), Livepeer (LPT), Eos (EOS), and Factom (FCT).
Don’t see your favorite crypto asset? Cosmos, Algorand, Loom, and NuCypher are coming soon. We will keep you updated as we add support for new assets.
Sign up and follow the directions here for more about staking with us.
Current ETH Lending Yields
There are both on-chain and off-chain crypto asset lending solutions.
Below are various crypto asset lending solutions and annual ETH lending yields.
Sign up here to learn more about lending with Staked.
About Staked
Staked helps institutional investors reliably and securely compound their crypto by 5% — 100% annually through staking and lending. Staked runs validation nodes for proof-of-stake currencies and offers access to on- and off-chain lending options that provide an annualized yield of in-kind currency.
If you enjoy Seeking Yield or are a fan of what we are building at Staked, give us a shout on Twitter, LinkedIn, or tell your friends and colleagues.
