Yield Layer Overview
rstETH yield layer is defined by CIAN as an accessible and diversified layer that consolidates, reorganizes all the secure and sustainable yield sources across the entire crypto into structured yields, and redistributes the yields to rstETH holders.
The yield layer:
- focuses on the scalable & sustainable yield sources
- eliminates mismatch between yield sources and assets
- dynamically (re)matches assets with a vector of yield sources & strategies in a decentralized way for optimized APY
Architecturally, rstETH yield layer is a vertical layer consisting of 2 segments: asset allocation module and strategy building module. All strategies are in smart contracts to maximize transparency.
Historical APR
Using the ETH Hybrid long-short strategy as an example, the organic APR has remained stable over the past three months, even amidst overall market underperformance.
Strategies & APR Estimation
Recursive Restaking Strategy
When 1 rstETH is deposited to the Recursive Restaking vault,, the organic APR is 18.41% + 10x restaking points rewards(Symbiotic + Mellow).
Estimate the APR for points under three different scenarios, along with the respective total Recursive Restaking Strategy APRs as detailed below:
- Bullish Scenario: 822.41%
- Base Scenario: 248.41%
- Bearish scenario: 202.41%
Hybrid Long-short Strategy
When 1 rstETH is deposited to the Hybrid long-short strategy vault, the organic APR is 17.63% + 2.08x restaking points rewards(Symbiotic + Mellow).
Estimate the APR for points under three different scenarios, along with the respective total Hybrid Long-short Strategy APRs as detailed below:
- Bullish Scenario: 184.86%
- Base Scenario: 65.47%
- Bearish scenario: 55.90%
Risk Profile and Mitigants
1. Smart contract risks: the potential vulnerabilities and threats associated with the deployment and execution of smart contracts on blockchain platforms.
Mitigants:
Asset allocation is based on multi-sig contracts that enhance security by requiring multiple private keys to authorize transactions, reducing the risk of unauthorized actions.
Authority organizations conduct expert reviews to ensure compliance with industry standards, detect vulnerabilities early, and increase trust among users and stakeholders.
2. Liquidation risks: risks occur when the value of the collateral in a leveraged position falls below a certain threshold, triggering the automatic sale of assets to cover the borrowed amount.
Mitigants:
24/7 LTV Monitoring: CIAN’s in-house strategies continuously monitor LTV ratios around the clock.
Automatic Deleveraging: If LTV ratios approach critical levels, CIAN will smoothly and automatically execute deleveraging to maintain safe collateral levels.
3. Depeg risks: risks arise when rstETH deviates from the price of stETH/ETH
Mitigants:
When the price is unpegged for rstETH and stETH/ETH, CIAN yield layer will automatically re-allocate the assets to liquidity pool to help price re-peg.
To maintain transparency at the same time, asset allocation will execute instantly, after which a proposal will be submitted to the forum to be voted against in 48 hours. The upgrade will roll back only if the voting passes a pre-set threshold within 48 hours.
