In the current decentralized finance (DeFi) field, leveraging and re-staking has become an important strategy to increase airdrop returns. However, can this strategy really bring higher returns? We will verify it through real-time operations.
In last month’s real re-staking, we divided the funds into 5 equal parts and carried out “leveraged re-staking + liquidity mining” in Juice, Stella, and Extra. More than a month has passed, and there are two questions we need to answer in our review:
First, can the income from liquidity mining hedge the interest on leveraged lending?
Second, which protocol can bring more airdrop benefits?
The first question can be answered by looking at the current position of each protocol.
Let’s answer the first question first. Can liquidity mining offset the interest on leveraged lending?
Liquidity mining can offset the cost of leverage
The answer is yes: liquidity mining not only offsets the interest of leverage, but also creates a surplus, with Extra performing the best.
Not only did Extra fully absorb the interest on the loans, but it also had a surplus of around 11U.
The three positions of Juice in the picture are all negative. Obviously, the income from liquidity mining cannot offset the interest on the loan, as shown in the figure below.
Image Stella changed her position once during the process. The income from liquidity mining not only offset the interest on the 5x leveraged loan, but also had a slight surplus. In addition, she also received additional Pendle and Arb rewards, as shown in the figure below.
Picture Based on this, we can draw a simple conclusion: Extra has the best liquidity mining benefit, Stella is second, and Juice is the worst.
However, our goal is to get more re-staking airdrops by adding leverage. Therefore, the next step is to compare the benefits of re-staking airdrops.
Since Renzo (ezETH) and KelpDAO (rsETH) do not provide real-time sub-protocol airdrop point queries, the only airdrop points we can compare are those of Etherfi (eETH).
2. Leverage and then pledge to get the highest return
- Since Extra did not offer weETH re-staking at the time of opening, we can only compare the re-staking airdrop effects on Juice and Stella.
The funds we allocated are all 0.12 ETH, but there are two obvious differences.
First, the underlying assets of the collateral are different. Juice collateralizes WeETH and then borrows WETH for liquidity mining; Stella directly collateralizes 0.12 ETH.
Second, the leverage ratios are different. Juice has a 3x leverage ratio, while Stella has a 5x leverage ratio.
Like you, I initially thought that using Stella with 5x leverage would have higher re-staking airdrop points, but the reality is just the opposite.
Please see the picture below. The 95.29K points in the box are the additional benefits of using WeETH as loan collateral.
Looking at the Etherfi points in the two circles in the picture, Juice is 285k, Stella is 266K, and the EigenLayer points behind are both 284. It can be seen that the invested funds are basically the same.
Adding the points directly staked in WeETH in the box, the answer should be clear. That is:
Using Juice's 3x leveraged liquidity mining can bring more re-staking point income than Stella's 5x leverage.
The reason is very simple. In order to make leverage a reality, Stella also shared the re-staking points with users who provided deposits. Stella made this clear through a pinned announcement, as shown below.
In fact, Juice’s airdrop income does not only come from re-staking.
3. Juice’s additional airdrop bonus
You should have noticed that Juice itself is also airdropping. Click on the LeaderBoard in the picture above and you will see your Juice airdrop points. Not only that, because Juice is on the Blast chain and you also participate in liquidity mining, you can also get all the airdrop points in the picture below.
However, currently only Blast points can be checked at this link https://t.co/2z6E45xsZT .
Nevertheless, it can be confirmed that "leveraged re-staking + liquidity mining" on Juice can achieve the greatest airdrop benefits, not only re-staking airdrops, but also airdrops from Blast L2, and airdrops from 3 Dapps including Thruster and HyperLock, including Juice itself.
Conclusion Here comes the problem. Juice has the largest potential airdrop in the future, but Juice has not been able to achieve zero-cost leverage, so it needs to pay additional borrowing interest. This is actually easy to understand. Everyone recognizes Juice's current model of killing many birds with one stone. Although they need to pay more interest costs, they are still willing to continue to participate.
However, this may not be the case for you. You should choose according to your risk preference. If you have a principle that your principal cannot be lost, then I suggest you choose Stella and Extra. Although the airdrop yield is not high, your principal will not be lost.
If you are like me and think it is worth paying a little interest to get more future airdrop opportunities, then you should choose Juice.
The key is that your choice should be able to make you feel at ease. If this choice makes you unable to sleep or eat, then don't hesitate. This choice is wrong and it is not suitable for you. Change it immediately.
Below is my choice, this is my actual trading link https://t.co/jEMtZowt3g , you can see my actual trading here at any time.
As the market develops and various protocols are continuously optimized, the leveraged re-staking strategy may undergo new changes. In the future, I will pay close attention to the dynamics of these protocols so as to adjust the strategy in a timely manner to maximize the benefits of the airdrop.
Okay, that’s all for today. If you are interested, please follow us!
WeChat 1: victeam005
WeChat 2: shijie20170405
Twitter: https://twitter.com/VICOINDAO
