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hyETH is designed to track and gain exposure to some of the highest ETH-denominated yields available within the DeFi ecosystem. Tokenisation of these strategies abstracts away the complexity, management, and need for continual monitoring and trading for users.
hyETH targets ETH yield opportunities greater than 4.00% higher than the staking rate, as defined by 30d APY from dsETH. To be included, strategies must have the following attributes:
- Strategies must be listed on DeFi Llama Yield Rankings 8 denominated in ETH, available on Ethereum, and have the attribute of “no IL.”
- Strategies must have at least 5,000 ETH in TVL.
- Strategies must have a 30d APY at least 400 bp higher than the backward-looking APR of dsETH.
- Strategies must not have locking mechanisms or caps.
- Strategies with fixed terms must mature at least three months from the rebalance date; the initial composition may have a shorter duration due to the timing of the formal product launch.
- Strategies must be compatible with Index Protocol and not require additional engineering work to make it compatible with the SetToken. Index Coop may take on additional engineering work to make a strategy compatible, but it is not obligated to do so.
- Strategies must be separate from aggregators or actively managed.
- No protocol can account for more than three strategies or 60% of the composition.
- Protocols underpinning these strategies must be open-source and have published audits.
- All airdrops and rewards will be absorbed into the token and realised as yield by token holders.
- All fixed yield positions will be held to maturity, and yield will be based on the current APY, not the 30-day average APY.
The composition will consist of the top five strategies, ordered by TVL, that meet these criteria; the included strategies will be weighted equally. A maximum of five strategies will be included at any given time.
hyETH will be rebalanced monthly to reflect the most current strategies in the composition. The product will not be rebalanced if there is no necessary recomposition (i.e., added or removed component). If any components are added or removed, the resulting rebalance will be executed via auction. If a component remains in the composition and its weight is between 17.5% and 22.5% of the index, it will not be reweighted.
Annual Fee: 0.95%
The following risks may apply to this digital asset: full or partial loss of digital assets due to technical hacks, exploits, or failures that may occur at the protocol or smart contract level of a product’s infrastructure; restrictions placed on the digital assets by regulatory authorities in the end users region; loss of digital assets or loss of access to the digital assets due to decisions made by centralized providers of the underlying assets; full or partial loss of digital assets through standard product operations which can be hampered by unexpected market conditions; full or partial loss of digital assets due to changes to underlying product assets made by the originating protocols; full or partial loss of digital assets due to volatility, correlation, value at risk, and contagion risks; underperformance of digital assets due to deviation from intended methodology; full or partial loss of digital assets due to the variability and potential volatility of the yield source.
