Deus Ex DAO

#Tradeidea fur June 2024: generate over 50% APR building a Synthetic USD position using @ipor_io (very low risk quasi delta neutral position) using the wstETH mining function powered by IPOR staking on Arbitrum As I am about to take my fat summer holiday, I am looking at diversifying my delta neutral positions for easy, safe and high APR while not looking much at the screens. And it is raining yields currently on IPOR. Liquidity mining on IPOR V2 using Arbitrum currently provides amazing opportunities, boosted by IPOR's LTIPP summer campaign distributing 112,500 $ARB, Lido incentives of 4 $wstETH and 142,000 $pwIPOR. The trade I am about to describe is similar to Ethena synthetic USD in its logic but the return is much higher and most importantly certain, it embeds a great upside for even higher return, and importantly the centralization risk divided by 4 in comparison to Ethena. In more details, in this trade you will earn cumulatively : the power of IPOR staking, the ETH staking rate, ETH contango rate, LTIPP ARB incentive Lido wstETH incentive pwIPOR incentives This is for education purpose only, I will make it simple, up to you to decide if you are a Ethena crowd moron or a smart DeFi user. My current portfolio of passive yield generation includes Pendle PT positions on uniETH and rzETH, Spot vs dated futures basis, opportunistically spot vs perps in GMX (synthetic decentralized USD) and the whole portfolio currently runs at around 43% APR daily. In short the bar is high for diversification, but this trade idea fits the league and will likely stay in the portfolio for the coming year. The problem: finding the right allocation of $IPOR to delegate against a $ETH staked position (zapped in $wstETH )and hedged by $ETH dated futures to enjoy a delta neutral position on ETH and an extra premium on the basis between spot and dated future. I have computed the best capital allocation that minimize volatility of the portfolio. my finding for a capital of $10k $2310 or 23.1 % in $IPOR to be staked in delegated pwIPOR $5380 or 53.8% in $ETH to be zapped in staked ipwstETH $2310 or 23.1 % in $ETH to place as collateral in Deribit a short position of $7690 in 26jul deribit future contract in another words, a portfolio composed of 23% IPOR and 77% synthetic USD for at least 50%APR You do not need to go to a staking platform to generate your wstETH using your ETH, IPOR does it for you using their Zapping function. And that s a blessing, as the whole trade would be tedious to put in place on your own. I have just adjusted the cursor on their dashboard for the desired USD equivalent balances of ipwstETH and pwIPOR after zapping. Obviously a directional position on $IPOR is inevitable, but 1/each IPOR upgrade is a major support for its ecosystem, and IPOR FUSION looks like a major disruptive innovation in the Asset management space. 2/ when your capital allocation in IPOR is 23% while the APR is over 50% on your capital, it does not really matter where $IPOR is going, I will still secure a fat return even if $IPOR underperform. Nevertheless, optimizing the risk/rewards of such a position still makes sense. The volatility of the trade is diluted enough, such as using a z-score model, the probability to lose money from the direction of $IPOR over the coming year is near zero. 3/ The beauty of the IPOR tokenomics lies in the virtuous circle embedded within the model. While I do not claim to possess the same brilliance as the minds behind it, my implementation of numerous trades based on empirical modeling has shown that the proportions are usually similar, with 20 to 25% in IPOR tokens supporting a delta-neutral position. This low percentage effectively dilutes the risk of the entire high-yield strategy, significantly enhancing the token's utility in generating such yields. Thus, the model inherently supports a virtuous circle. To create the synthetic USD position, I have neutralized my $ETH exposure by selling futures value 26july on Deribit for the same ETH notional with a x3 leverage. The contango (difference between future price and spot price) is really amazing right now at 16% APR without leverage. A more conservative leverage would not affect the potential of the trade, but x3 leverage for such a shot tenor on futures is fine, i expect in fact this spread to widen more in the short run, so I will probably roll against the next futures dates opportunistically later on. [ note: When @cvex_xyz will go live, I will be able to do the whole strategy fully in DeFi, avoiding the CEX risk. The Synthetic USD will be fully decentralized at that point, i will not rely on a Bahamas or Seychelles moronic traders to sit on those massive derivatives positions praying they understand what risk and collaterals mean, it will be finally programmatic] I optimized the proportions of my engaged capital (IPOR + stETH + collateral on Deribit) against the volatility of such a portfolio. As usual I use annualized ATR as a less conservative estimation of real volatility. Generating roughly 50+% with a return/risk ratio of 3.3 I am probably a bit aggressive on my weights ratio, emphasizing on the virtuous effect of the IPOR tokenomics. A safer statistical bet (higher risk reward ratio) would eventually favor a lower proportion of IPOR in your combo (17% of IPOR allocation for risk reward of 4.25 and minimum return of 48%). I attached my model results to adjust the IPOR allocation to ones risk appetite I made the assumption that 25% of the ARB incentive and 100% of lido incentive will be dedicated to that pool. And still I did not factor in my computation : the pwIPOR inventive as an extra bonus on top, and the few extra percent from ETH staking rates. 50% looks like a base case As usual, get your parents guidance and surveillance #APR #passiveyield #IPOR #liquiditymining #Staking #iporfusion #wstETH If you like this post, please share, follow, comment, retweet, DM

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