Midas.Investments is pleased to announce the release of two new CeDeFi strategies – “1.5x Long on ETH” and “0.5x Short on ETH.” These new strategies will replace the existing “Soft Long on ETH” and “Soft Short on ETH” CeDeFi strategies first released in August 2022.
As is the case with the existing CeDeFi strategies, these new strategies will not pay out a daily yield but will instead appreciate or depreciate in value.
The Midas team seeks to create profitable investment tools for users by developing novel strategies that can deliver sustainable, passive returns. These strategies can prove exceptionally lucrative as they combine CeFi’s reliability with DeFi’s high profitability.
Midas’ innovative CeDeFi investment strategies have incorporated automated algorithms and are built with smart contract functionality to further simplify the investment process for users.
1.5x Long on ETH (LETH ticker)
DeFi strategy with 1.5x leverage on ETH that also generates up to 6% APR by providing liquidity in correlated liquidity pools. Users benefit from leveraged ETH exposure, as well as yield on top of that.
Expected APR: 5-6% (estimated yield farming rewards, excluding ETH performance)
Overall risk: Medium
LETH is a directional instrument with linear payoff replicating ETH price movements with 1.5x leverage. The strategy accomplishes 1.5x leverage by swapping deposited USDC to ETH, supplying ETH on AAVE, borrowing USDC at a 1.7 health factor, and swapping USDC back to ETH. The strategy earns yield by supplying borrowed ETH on Aura. Half of the borrowed ETH is swapped to rETH and deposited into a Balancer rETH-ETH pool on Aura. Depending on market conditions, the pool composition may change slightly. Earned rewards are reinvested for optimal efficiency.
0.5x Short on ETH (SETH ticker)
DeFi strategy with 0.5x leverage on ETH short that also generates up to 3% farming APR by providing liquidity on Convex. Users benefit from an on-chain short instrument which also provides yield, similar to a perpetual futures contract with a consistently favorable funding rate.
Expected APR: 2-3% (yield farming rewards, excluding ETH performance)
Overall risk: Medium
SETH is a directional instrument with linear payoff replicating ETH price movements with 0.5x leverage. The strategy accomplishes 0.5x leverage by depositing users’ USDC on AAVE, then borrowing ETH at a 1.7 Health Factor, and selling it for USDC.
Strategy liquidity is deposited into a correlated FRAX-USDC liquidity pool on Convex to earn yield. Depending on market conditions, the pool composition may change slightly in favor of a more optimal pool in terms of risk-reward ratio. The investment team at Midas is in charge of monitoring relevant pools and will be notifying the community of any updates to the allocations within the strategy. Earned rewards are reinvested for maximum efficiency
How to Invest in CeDeFi Strategies
As with the existing strategies, users may seamlessly swap into and out of all CeDeFi strategies at any time with any supported asset, allowing users to rebalance their portfolio based on their investment preferences. Investors may track the full allocation and health of the position through on-chain monitoring tools for full transparency of strategy performance.
Midas uses portfolio monitoring tools to mitigate strategy shortcomings, however, the platform is not responsible for malicious events impacting protocols or the inefficiency of the strategies. In short, investment responsibility ultimately falls to the individual, and it is advised that investors do their own research before engaging in each of these strategies.
Learn more about Midas’ CeDeFi investment strategies, including the risks associated with each, on our Wiki page. If you have any questions, please join the Midas community on Telegram or Discord. Our team is always glad to help!