My logic is like this: If you have 32ETH, solo staking

Question

My logic is like this: If you have 32ETH, solo staking

= 32 ETH * 5% = 1.6 ETH
Do be validators with 87.5% LTV, ie borrowing 28 ETH from others, you get 32*8*5% - 28*8*4% = 3.84 ETH
The borrow rate needs to be ~5.7% to offset the reward gained by validators

Not sure if I’m correct on this and feel free to comment

And the 28*8*4% needs to be multiplied also by a factor of ETH staked/sfrxETH to reflect the true lending rate/ yield of sfrxETH, subsidized by frxETH holders who go for LPs
In other words, the spread between lending rate and borrow rate is further reduced

Am I right?

#cryptocurrency #english #frax

0

04.08.2023

5 ответов

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C2tP

No, don't think about sfrxeth when thinking about validator rewards. Has nothing to do with it

0

04.08.2023

AnT Автор вопроса

Mark11
Why does the borroe rate need to be 5.7% - you onl...

I mean assuming the conditions, 5.7% would be the rate at which validators still can make a profit even staking reward is 5%

0

04.08.2023

AnT Автор вопроса

C2tP
No, don't think about sfrxeth when thinking about ...

Make it simple: If you have 32ETH, solo staking = 32 ETH * 5% = 1.6 ETH Do be validators with 87.5% LTV, ie borrowing 28 ETH from others, you get 32*8*5% - 28*8*4% = 3.84 ETH Is it right?

0

04.08.2023

C2tP

AnT
Make it simple: If you have 32ETH, solo staking = ...

Sounds right as that's 12% Apr vs 5% which is 2.4x rewards Thus the spread should end up being smaller than that as that's obviously a pretty big boost

0

04.08.2023

Mark11 · Accepted Answer

Mark11

Why does the borroe rate need to be 5.7% - you only pay a borrow rate on what you borrow

0

04.08.2023

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My logic is like this: If you have 32ETH, solo staking

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