turYETH and staYETH (Turbo and Stable)
Last updated
Last updated
In Tranchess V3, we define a new category of product: Yield ETH, or YETH for short. Both staYETH and turYETH are Yield ETHs.
staYETH stands for "Stable Yield ETH", and turYETH stands for "Turbo Yield ETH".
staYETH allows you to fix your yield 365 days ahead without worrying about the fluctuation of ETH staking APR. staYETH has no lock-up period, and users can swap it back to wstETH or stETH anytime.
In short, turYETH earns everything that is above the fixed yield staYETH gets. We all know that when the Ethereum network is active, and transaction volumes increase, the staking APR will also increase. turYETH allows users to long and earn a leveraged staking yield when ETH staking APR rises. Some might say turYETH allows you to leverage "the Ethereum gas fees."
Like staYETH, users can swap turYETH back to wstETH or stETH anytime.
Letβs say the YETH holders (that is both staYETH and turYETH) agree to a locked-in interest of 3.5% for staYETH. Assume by year-end, the actual APR for staked ETH is 4.5%, and 10 stETH= 9 staYETH + 1 turYETH.
10 staked ETH earns 10*4.5%=0.45 ETH, of which 93.5%=0.315 ETH is paid to staYETH holders. turYETH holder would receive 0.45-0.315=0.135 ETH, giving turYETH an actual APR of 0.135/1*100%=13.5%.
Under the same assumptions, here's what the APRs of staYETH and turYETH would be as the APR of stETH changes:
We used annual return rates in the calculation above just for ease of understanding. Don't forget, there's no lock-up period for staYETH or turYETH. You can swap them for stETH/wstETH anytime you want, and the APR follows the same calculation, factoring in the time length.
Provide liquidity to the staYETH-wstETH AMM Pool with your staYETH tokens and earn an additional CHESS reward! Providing liquidity does not hinder staYETH's ability to collect stable APR earnings.
Many of our long-term users would ask: does V3 has rebalance? If yes, how often would it be?
staYETH and turYETH rebalance every 365 days, after which their fair values will be reset back to one. Since the APR for staYETH is fixed for 365 days, you can also think of the rebalance as we close the old pair of staYETH and turYETH, and start a new round with the new ones.
