LRT ynETH + Stablecoin Strategy

MAX LRT Strategies
1

LRT ynETH + Stablecoin Strategy

ynETH

Strategy Description:

This strategy utilizes ynETH to borrow crvUSD at low rates then farms the new ResupplyFI protocol which offers high rewards in it’s early stage. A reUSD/scrvUSD LP position is deposited into YearnFi for additional yield.

Protocol Risks:

  • Smart Contract Risks: For the exception of Resupply Finance, all protocols being used are battle tested and approved by CurveDAO and have the blessings of the LlamaRisk team. Parameters of smart contracts are subject to updates approved by CurveDAO.

  • Market Risks: Potential Depeg, ETH Liquidation, Bad Debt, Oracle manipulation, Illiquidity in the event of a bank run, volatility that may cause fluctuations in borrowing and lending rates

  • Operational Risks: Unsure

Protocol’s Liquidity History:

  • ynETH Curve Lend: Deep liquidity - $1.02M available, 2.12% utilization

  • Curve Lend is a Blue Chip protocol and battle tested

  • ReSupply CRV Lending market: Collateral deposited on Resupply are deposited on Curve Lend and Curve Lend has deep liquidity

  • YearnFi Vault reUSD/sfrxUSD: New vault; not yet available, Farming will be on Curve

*All platforms will be farming on Curve Finance

Redemption Flows:

  • Detailed Flow:
  1. Use ynETH as collateral on Llamalend to borrow crvUSD for 0.11% APY

  • Example using a 52% LTV for safety in this volatile market:

  • Lend 100 ynETH ($191,500)

  • Borrow $100,000 crvUSD for 0.11% APY

  • Liquidation range: $1,005 - $1,322

  1. Deposit $80,000 crvUSD into ReSupply crvUSD Lending market

  2. Borrow $60,000 reUSD for 18.71% APR

  3. Sell $30,000 reUSD for $30,000 scrvUSD

  4. Deposit 30k reUSD/30k scrvUSD into LP on CurveLend ETH for ~3% APR

  5. Deposit reUSD/scrvUSD LP into YearnFi for ~40% APR

  6. Still have $20,00 crvUSD idle to use for the case of soft liquidation for crvUSD and emergency issues or depeg to withdraw crvUSD from ReSupply, since it is a new unproven protocol

  7. When positions are liquidated, rewards will be used to purchase ynETH and added to the initial position

Rough yield calculations:

  • -$110 (-0.011% on $100,000) for Llama lend

  • +$14,000 (+17.5% on $80,000) for ReSupply

  • +$1,800 (+3% on $60,000) for reUSD/scrvUSD Deposit

  • +$24,000 (+40% for $60,000) for reUSD/scrvUSD LP deposit on YearnFi

  • $39,690 yearly yield ( 20.7% for $191,500 initial ETH amount)

Total stable coin yield not including ynETH yield: 20.7%

  • Potential Issues: Illiquid pools may hamper borrowing and/or withdrawing collateral

Best-case Scenario:

  • Maintain position for one year, monitoring. ETH price stability on Curve, crvUSD/reUSD pegs on Resupply, and LP performance on Yearn. Adjust leverage if market conditions are favorable.
  • Unwind the position
    • Withdraw LP from Yearn Finance
    • Repay reUSD on ReSupply
    • Repay crvUSD on Curve Finance
  • Liquidate all rewards into ynETH or YND token

Worst-Case Scenario:

  • Regarding borrowing crvUSD on Curve Finance with ETH Collateral
    • If Ethereum’s price crashes dramatically due to a market downturn, Black swan event, or major hack it is possible that the soft-liquidation mechanism of the LLAMMA algorithm could sell off all collateral into crvUSD
  • Regarding the deposit of crvUSD into Resupply Finance to borrow reUSD
    • Possible crvUSD depeg reduces collateral value of Resupply, triggering a liquidation event resulting in the loss of most of the crvUSD collateral
  • Regarding the reUSD/scrvUSD LP
    • A depeg causes pool unbalance resulting in impermanent loss

Conclusion - Why Add This Strategy:

  • Curve Finance is the backbone of this strategy and Resupply and Yearn Finance leverage the strategy for more yield. These platforms are considered Blue-Chips of Defi and have been audited by the Llama risk team.

  • Even though these platforms are battle tested, in the grand scheme, Defi hasn’t been widely adopted. If these positions are held for 1 year it is possible that the rewards rise in value much higher than the target 20.7% APR.

  • This strategy aligns with YieldNest’s broader objectives in finding the best risk-adjusted returns.

Submitted by: Msojumper

Date: 30 March, 2025

2 Likes
3

Appreciate you putting this together—really interesting cross-protocol strategy that plays to YieldNest’s strengths.

Positives:

  • Strong use of ynETH as productive collateral (Unfortunately, the LP focus is now more on ynETHx; this probably works better with ynETHx)
  • Taps into early-stage farming incentives from ReSupply + YearnFi, which can meaningfully boost APY.
  • Conservative LTV and idle crvUSD buffer show good risk awareness.
  • Tightly integrated with Curve’s ecosystem—solid from a composability and trust standpoint.

Points to Watch:

  • ReSupply is the main unknown here—still early and relatively unproven, especially under stress.
  • LPing reUSD/scrvUSD opens up depeg + IL exposure; might need monitoring tools to track peg health in real time.
  • Operational flows are complex—good for advanced users, but not plug-and-play just yet.

All in all, this is exactly the kind of thoughtful, modular strategy we’re looking to explore. We’ll definitely take it into consideration as we expand utility and integrations across the MAX vaults.

Thanks again—keep these coming!

1 Like
4

Thx for the feedback, Amadeo!

These strategies are fun to develop. I’m starting to realize that they should be simple and bomb proof. As of right now, I would not feel comfortable managing large amounts of money in my strategy.

During the next AMA could you go over your thought process when developing strategies.

1 Like
5

Yeaa these DeFi strategies are great :smiley:

Form the doc’s: MAX LRTs | YieldNest Docs

“Think of MAX LRTs as an evolving, intelligent DeFi engine constantly analyzing data, discovering new strategies, and optimizing capital deployment. As more data is fed into the system, it learns, adapts, and improves, refining its strategies over time. New strategies are initially introduced as external integrations, rigorously tested, and monitored. Once a strategy matures and demonstrates long-term safety and efficiency, it can be enshrined within the MAX LRT, operating under the governance and oversight of the specific MAX LRT subDAO.”

So we can already make these strategies possible externally… so people can try them.
We can also see how all the flows work in more detail.

Once the strategy goes well and there seems to be low risk, or the risks we see are clearly monitored and minimized, then we can enshrine them in the MAX LRT.