st-yETH is coming to FiRM, marking the latest collaboration between Inverse Finance and long-time partner Yearn Finance!
What Is st-yETH?
st-yETH is a staked version of the yETH token, derived from Yearn Finance’s innovative yETH protocol, which itself is a liquidity pool token consisting of various Ethereum Liquid Staking Derivatives (LSTs). By staking yETH, users receive st-yETH, enabling them to earn yields and participate actively in the governance of the yETH pool, influencing its operations and strategic direction.
Who Created yETH?
Yearn Finance, pioneers in DeFi and close friends of Inverse Finance, created yETH. Yearn are known for developing automated strategies to optimize yield farming, Since inception, they have played a pivotal role in advancing the DeFi ecosystem through products like yETH that simplify and enhance liquidity management.
How Does st-yETH Work?
The yETH protocol operates as an Automated Market Maker (AMM) for LSTs, allowing users to deposit their tokens into the pool in exchange for yETH tokens, which are pegged 1:1 with the beacon chain ETH. Here’s the workflow:
Deposit and Pooling: Users deposit LSTs into the yETH pool, receiving yETH tokens in return.
Staking for Yield: By staking yETH, users mint st-yETH and start accruing yield generated from the underlying assets.
Governance Participation: st-yETH holders wield governance power, voting on decisions like pool composition and protocol parameters, which are adjusted every epoch to optimize yield and manage risks.
How Do I Deposit and Borrow Against st-yETH In FiRM?
To leverage st-yETH within FiRM, follow these steps:
Deposit: Head to inverse.finance and open the FiRM webpage, navigate to the deposit section, and select st-yETH as your collateral.
Borrow: With st-yETH as collateral, you can borrow DOLA against it. The terms are fixed-rate, providing predictability and stability. Read more here.
Manage Your Borrowing: Keep an eye on your loans, adjust as necessary, and ensure compliance with the platform’s requirements to avoid liquidations.
DYOR: Understanding Risks and Rewards
Before diving into st-yETH or any DeFi product, conducting thorough research is imperative. Consider the following:
Security and Audits: Yearn Finance has undergone multiple security audits and maintains a proactive bug bounty program to address vulnerabilities.
Governance and Structure: The yETH protocol benefits from a robust multi-DAO governance structure, ensuring decentralized decision-making and resilience against regulatory or operational shifts.
Market Position and Competitive Edge: st-yETH offers a unique proposition in risk-adjusted yield generation, distinguished by its integration with Yearn Finance’s broader suite of yield-generating strategies.
Risk Assessment: Regular assessments by Inverse Finance’s Risk Working Group (RWG) ensure that st-yETH remains a viable collateral option with a solid risk profile, supported by detailed analytics and real-time market adjustments. Our first assessment can be accessed here.
As you explore the potential of st-yETH within the FiRM ecosystem, leverage the wealth of resources available, including Yearn’s detailed documentation, community forums, and real-time governance updates. This due diligence will equip you to make informed decisions aligned with your financial strategies and risk tolerance.
