Written by: 2Lambroz

Compiled by: Deep Tide TechFlow

Earn 141% yield on dYdX at dYdX!

Or make 125% yield + 12% delta neutral liquidity mining $DYDX through hedging on perpetual contracts.

Explore the step-by-step guide to earning LSD yield on Cosmos.

With more attention on Cosmos due to the DYDX application chain, $TIA, and $DYM, why not learn more about liquidity staking on Cosmos?

Summary

pSTAKE Finance is a liquidity staking protocol focused on Cosmos assets.

I have been exploring because of the DYDX application chain, $TIA, and $DYM gaining more attention on Cosmos, and I have found some great yield patterns!

I will walk you through step by step on how to earn 125% yield on dYdX at pSTAKE Finance.

What is Persistence and liquidity staking

Persistence is the liquidity staking protocol for Cosmos.

Liquidity staking involves tokenizing the position of staked assets, allowing users to maintain liquidity while earning yield.

For example, if you want to stake $DYDX, you would have to wait 30 days to unstake and redeem your position.

But if you stake through Persistence, your staked DYDX position will be stkDYDX, which is the tokenized position of the staked position.

In simple terms, it's earning staking yield while maintaining liquidity.

This allows you to:

• Exit the staking position without waiting for 30 days, directly sell your stkDYDX

• Provide LP and earn DYDX/stkDYDX trading fees

• If stkDYDX is at a discount (not 1:1 with dydx), you can buy stkDYDX and unstake after 30 days to earn the price difference

Persistence offers a range of liquidity staking options, but I am focusing on $DYDX because it currently has the best yield.

Persistence is the parent company of Pstake Finance and Dexter, which is the dex for staked assets.

Strategy Description

• Stake half of your DYDX into stkDYDX

• Provide LP on Dexter to earn 125% APY

• Optional: Short dydx on CEX to earn an additional 12% APY and maintain Delta neutrality

Here are the detailed steps:

1. If you only have assets on EVM, you can use @CCTPMoney to transfer funds to the Cosmos chain, the route must be EVM -> Noble -> Persistence

If not, you can use CEX to send funds to XPRT, then exchange to DYDX on Dexter.

2. If you use CCTP funds, you now hold USDC, buy DYDX on Dexter, click here to go to the website.

3. Stake half of your DYDX into stkDYDX

4. Add liquidity on Dexter and bond for 7 days to earn 141% APY

Bonding means you need to lock the position for 7 days to receive additional emissions of $xprt yield (125.78% APY).

What if you are concerned about the price of DYDX falling?

Hedge it! Also known as the Delta neutral strategy.

Assuming I have 250 DYDX and 250 stkDYDX in the LP, this means I have a price exposure of 500 DYDX.

So if I also short 500 DYDX on CEX, it means my DYDX price exposure is 0, because I hold 500 DYDX and short 500 DYDX at the same time!

In fact, because the funding rate has always been positive, your short position will also receive a subsidy (if the funding rate remains unchanged).

Equally interesting, $STARS from the cosmo NFT chain from @StargazeZone (where badkids NFT is located) has been proposed to be listed as one of the staked assets, which may bring some yield.

Conclusion

• If you already hold it, the liquidity staking yield on DYDX is good

• Delta neutral mining can be done

• It's worth learning more about LST

• It's always good to pay attention to the persistence ecosystem, and recently, Cosmos SDK assets have been receiving attention, such as $TIA, $DYM, and so on

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