Summary
This proposal is to list a Convex ETHx/ETH leveraged vault on Mainnet. This vault will enable users to borrow ETH and deploy it into the ETHx/ETH Curve pool to earn swap fees and CRV incentives. ETHx can be freely redeemed for ETH, and this strategy provides opportunities to maximize yield on ETHx through providing liquidity to the Curve pool and staking on Convex.
Rationale
ETHx has sufficient on-chain liquidity across both Curve and Balancer, providing liquidity to support leveraged positions. Notional users can take advantage of this by borrowing ETH to deposit into the Curve ETHx/ETH pool where users can earn ETHx staking yield, swap fees, and CRV incentives.
The following factors support the listing of this vault:
- On-Chain Liquidity
ETHx has sufficient onchain liquidity across Curve and Balancer to support a meaningful amount of exposure. Across Curve and Balancer, ETHx maintains approximately 59.7% liquidity from non-ETHx assets, offering good support to ETHx peg stability.
| Protocol | Pool | Chain | ETHx liquidity | Non-ETHx liquidity | % non-ETHx liquidity |
|---|---|---|---|---|---|
| Curve | ETHx/ETH | Mainnet | 1089 | 1316 | 54.7% |
| Balancer | ETHx/wstETH | Mainnet | 283 | 335 | 54.2% |
| Balancer | ETHx/rsETH | Mainnet | 188 | 668 | 78% |
| Total | 1560 | 2319 | 59.7% |
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Oracle
The vault will use Redstone’s ETHx/ETH oracle for pricing. This oracle ensures a secure and reliable price feed for the ETHx/ETH pair with a tight 0.5% divergence threshold, mitigating risk for leveraged positions.- Provider: Redstone
- Address: 0xc799194cAa24E2874Efa89b4Bf5c92a530B047FF
- Price pair: ETHx/ETH
- Divergence threshold: 0.5%
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Smart Contract Risk
ETHx has been audited by reputable security firms, including Halborn, Sigma Prime, and Code Arena.- Links to audits: ETHx Audit Reports
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Redemption
ETHx is freely redeemable for ETH. This ensures that any potential depeg event will be temporary.
Vault Parameters
| Parameter | Proposed Value |
|---|---|
| LiquidationRate | 1.03 (3%) |
| MinCollateralRatioBPS | 0.14 |
| MaxDeleverageCollateralRatioBPS | 0.27 |
| MaxRequiredAccountCollateralRatioBPS | 1.00 |
| Maximum Vault Capacity | 750 ETH |
| Minimum Borrow Size | 30 ETH |
| feeRate5BPS | 10 (50 Bps) |
| ReserveFeeShare | 80% |
Strategy Parameters
| Parameter | Proposed Value |
|---|---|
| maxPoolShare | 25% |
| oraclePriceDeviationLimitPercent | 2% |
Conclusion
The Convex ETHx/ETH leveraged vault offers a compelling opportunity for Notional users to earn yield on their ETH positions. With robust on-chain liquidity, reliable pricing through Redstone, and strong audit coverage for ETHx, this vault is a low-risk, high-yield strategy for ETH holders looking to maximize their returns through leverage.