Trade Future Yield With Downside-Protected Yield-Bearing ETH

The beauty of DeFi 3.0 is unlocking truly innovative and financially exciting new use cases. With the introduction of Bumper’s wstETH-USDT market, DeFi users can down trade market volatility with their staked ETH, unlocking compounding trade opportunities which massively out-perform staking solutions in the market. A unique proposition in the LSDfi sector.

Driven by the Ethereum Shapella upgrade, Liquid staking derivatives (LSDs) have been one of the biggest narratives of 2023. Put simply, LSDs are financial instruments that represent receipts of a staked token within a DeFi protocol. They allow users to stake their token, while granting them the flexibility to continue utilising these LSDs in other decentralised applications.

As one of the key players in the LSDFi space Bumper chose to support Lido’s stETH LST in its first release on the Arbitrum network. Through Lido, users stake their assets and receive liquid staking derivatives, allowing them to access the liquidity of their staked tokens for other DeFi activities, like Bumpering.

To participate in Bumper’s LSDfi wstETH-USDT market, Traders can either deposit Lido wrapped staked ETH on Arbitrum into the protocol, or buy wstETH on the market to essentially trade ETH market volatility. Lets look at the Lido Staked ETH use case in a bit more detail.

Lido Staked ETH into Bumper:

Firstly, the wstETH token that is tradable on Bumper is a wrapped staked ETH token sourced from the liquid staking platform Lido. To learn more about wstETH read here.

Check out Method 2 in our guide to getting wstETH

With this path, your principal asset (ETH) is staked and you benefit from the annual yield (currently at 3.8%) whilst unlocking trading opportunities to accumulate more wstETH in Bumper. 

Lets run a hypothetical scenario:

• You stake 5 ETH at today's market value ($2287 x5 = $11,435)
• You take 12x 30 day positions on Bumper through the year utilising various Bumper trading strategies and accumulate 5-65% more ETH, let's say 25% for this example, so 1.25 ETH (of course, subject to market conditions and trade execution, not financial advice).
• At the end of the year you have gained 0.179 ETH from Lido staking and 1.25 ETH from trading your yield bearing asset in Bumper.
• You have 6.429 ETH at market value in 12 months time. 
• Crucially,
• a) IF the price of ETH goes DOWN during this time your ETH during this time is also protected from downside. So if ETH has dropped to $1500 and you had a 90-99% floor price set in Bumper you retain the USDT market value and earn the Lido yield component. You beat the market.
• b) IF the price of ETH goes UP during this time you have realised those gains, you have also accumulated more and earn the Lido yield component. You beat the market.
• To complete the scenario, again hypothetically, the power of yield-bearing staled ETH plus Bumper trade-accumulation is incredible, let's look at 3 future ETH price states:

• ETH stays at $2287 in 12 months time. 6.429 ETH = $14,703 (up 28%).
• ETH at $3500 in 12 months time. 6.429 ETH = $22,501 (up 96%).
• ETH at $5500 in 12 months time. 6.429 ETH = $35,359 (up 209%).

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