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Thetanuts Finance unveils Leveraged LRT Strategy Vault, facilitating integration with Pendle’s PT-eETH

Thetanuts Finance unveils Leveraged LRT Strategy Vault, facilitating integration with Pendle’s PT-eETH

Thetanuts Finance, a decentralized on-chain options protocol, announced the integration of Pendle Finance’s $PT-eETH offering, according to information shared with Finbold on March 15. 

The integration sets the stage for a Leveraged Liquid Restaking Token (LRTs) Strategy Vault on the Ethereum (ETH) Mainnet, Thetanuts’ first foray into restaking within the burgeoning Decentralized Finance (DeFi) landscape.

DeFi restaking

Restaking allows DeFi participants to leverage staked ETH and secure yields beyond the Ethereum Mainnet. 

Born on EigenLayer and facilitated by liquid restaking protocols such as EtherFi, restaking allows users to stake their $stETH and generate LRTs for increased yields.

Presently, EtherFi stands as a prominent player in the LRT domain, with over $2.5 billion in Total Value Locked (TVL). 

It empowers users to mint $eETH by depositing various assets like $ETH, $stETH, $bETH, or $cbETH. 

Holding $eETH makes users eligible for rewards through EigenLayer and protocol points such as EtherFi Loyalty Points. 

Furthermore, protocols like Pendle Finance introduce new offerings like $PT-eETH and $YT-eETH to amplify $eETH yields.

$PT-eETH opportunities

$PT-eETH distinguishes itself by offering a fixed ~20% APY, redeemable at a 1:1 ratio upon maturity. 

Conversely, $YT-eETH is all about leveraged exposure to $eETH yields and points until maturity, after which it goes to zero value.

Thetanuts-Pendle collaboration

In collaboration with Pendle Finance, Thetanuts Finance pioneers the industry’s highest fixed yield for $ETH through its $PT-eETH offering. 

With the introduction of the Leveraged LRT Strategy Vault, Thetanuts offers a platform to further enhance the yields.

With this approach, $PT-eETH holders can deposit their tokens into the Thetanuts Finance v3 Lending Market and borrow $ETH, which they can use in the $ETH Call (“ETH-C”) Basic Vault to generate additional premiums. 

This gives users exposure to additional yield generation avenues, including, EigenLayer Points, EtherFi Loyalty Points, Pendle $PT-eETH Fixed Yield, Thetanuts Finance $ETH-C Basic Vault Option Premiums, and $NUTS Rewards.

The impact of Thetanuts’ Leveraged LRT Strategy Vaults

The launch of Thetanuts Finance’s Leveraged LRT Strategy Vaults introduces a novel yield-generating tool for LRT-related staking products in the options market. 

With an initial circulation of 150,000 $PT-eETH (~$577 million), Thetanuts plans to expand its offering to integrate other LRT protocols for similar strategies with other collateral assets.

However, investments in $PT-eETH short-call vaults come with inherent risks, such as short volatility risk. 

Despite the potential for enhanced yields, the possibility of deposit depreciation in the event of market downturns affecting eETH or PT-eETH values is ever present.

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