Staking is an investment in DeFi’s future.
You can provide liquidity to emerging projects, secure entire networks and earn from your tokens without actually selling them — which provides a crucial sanctuary in times of volatility.
So we’re ramping up the staking opportunities available via rhino.fi, and today we’re proud to announce the latest of these: icETH (interest compounding ETH), provided via Index Coop.
Here are the top-line details:
- 7% yield on your ETH.
- 1.5x the yield of regular staking rewards through leveraging.
- No extra fees.
- Stake and unstake whenever you want.
We’ll explain how this all works shortly, along with the security protection.
For now, let’s focus on the top-line: icETH allows you to beat the market, while helping to secure the Ethereum network because your funds are channeled towards carefully selected validators. You gain, and everyone else does too.
If you want to seize this opportunity and start staking Ethereum straightaway, without reading the backgrounder, then click here.
Ok, here are the FAQs.
How does this opportunity work?
icETH utilises both compounding and leveraging to maximise your staked crypto returns. Let’s look at leveraged staking first.
Essentially, this is the process of borrowing more funds to increase the value of your investment, and thus the rewards you return on it.
To take a very simple example: if an opportunity’s returning 10% and you have $100 to invest, you’ll only get $10 on your investment. However, if you borrow an additional $200 and invest it, you’ll suddenly be earning $30.
Index Coop, working in tandem with Aave, takes the leveraged staking process and automates it for you. Here’s how it works:
- When you deposit your ETH, you get a staked counterpart token, stETH, in return. A good way to think of this is like a share certificate, although, in crypto, you can actually keep trading it (people call it ‘liquid’ for this reason).
- With the help of Aave, which provides additional debt and collateral, Index Coop will deposit the stETH in order to borrow more ETH, which is then swapped for more stETH.
- This stETH is then deposited again, allowing for more ETH to be borrowed.
- This process then repeats itself until the target leverage ratio of 3.1x is reached. In other words, you’ve borrowed 3.1 times your initial investment.
As Index Coop makes clear in its own explainer on leveraged staking ETH, this means you get the highest effective return on ETH in DeFi today. What’s more, you pay the lowest fees.
What are the benefits of leveraged staking?
To understand the benefits of leveraged staking, in crypto or fiat, you need to understand how compound interest rates work.
Compound interest breaks your regular, annual interest payment down into regular compounding periods, when a portion of the interest is harvested and added onto your investment, so the payments gradually increase over time.
So if an opportunity pays 10% interest and compounds each month, you’ll earn 0.83% each time it compounds (10 divided by 12). If you invest $100 in this opportunity, you’ll earn $0.83 in the first month, and this is then added to your investment to make $100.83. So the next month you’ll earn $0.84 (because it’s based on $100.83), and so on.
As you’ll see, compounding interest attracts a greater return than regular interest because of the self-harvesting. With leveraged staking, the benefits are multiplied: essentially, you’re multiplying the extra return you’re receiving.
How is the risk mitigated?
Like any form of borrowing, leveraged staking is subject to extra risk than basic crypto staking. However, icETH’s smart contracts are programmed to minimise this risk.
In the event of heightened market volatility or a Black Swan event, icETH’s contracts will trigger some automated deleveraging. In other words, your stETH will be traded back for regular ETH (more specifically its cross-chain version, wrapped ETH).
What are the benefits of seizing icETH via rhino.fi?
Because you’re on rhino.fi, you can stake and unstake whenever you want. This is a major advantage over other ETH staking programmes, which require you to lock your stake up for an indefinite period.
And, because the opportunity is provided on Layer 2, your fees are kept to a minimum. You won’t need to pay pointless networking switching fees or hold native gas tokens, so what you earn is almost exactly what you get (we do take a small fee, but it’s far smaller than what you’ll pay elsewhere).
Why are we offering this opportunity?
Since we rebranded last year, our mission has been to provide access to all the best opportunities in DeFi from Layer 2.
Thus far, we’ve focused primarily on active trading opportunities via our cross-chain swaps portal. But we believe financial freedom should be passive, too, so you can enjoy the best crypto staking rewards without excessive fees gnawing at your gains.
We want to empower you to earn greater APY than you would elsewhere, while mitigating the risk. Indeed, we’ll do rigorous due diligence on all the opportunities we add, so you can rest assured that someone’s checked them thoroughly before they get to you.
icETH ticks all our boxes. It’s an opportunity to boost your APY through a proven mechanism, and Index Coop’s own deleveraging process offers a vital degree of protection.
So you can lock in outsize returns while helping to lock up the future of Ethereum. If you’re ready to seize now, then great: here’s that button again.