How to use your ETH to earn more ETH? Check out these 5 strategies

By William M. Peaster, Bankless Contributor

Editor: South Wind

ETH is the world's first " triple -point asset ": it is a capital asset (staking ETH will provide bond-like returns), a digital commodity (used to pay gas fees), and a non-sovereign value storage asset (similar to Bitcoin), all of which are packaged into a cryptocurrency, ETH.

Additionally, most DeFi and NFT activity still happens on the Ethereum network . Therefore, owning some ETH allows you to interact with the largest Dapps (decentralized application) ecosystem in existence. ETH is one of the main forms of currency in the crypto economy.

ETH is very useful, and more and more people are starting to hold ETH because they believe that the usefulness of this asset has just begun.

However, many current yield opportunities mean you have to part with your ETH temporarily, or if things go badly, permanently.

For example, when you join a new DeFi project’s trading pool and become its liquidity provider (LP), you are likely to face “ impermanent loss ” at some point, and if you withdraw liquidity when you encounter impermanent loss, you may lose some ETH.

Or maybe you bought a new NFT collectible at the bottom, but then the floor price of that NFT item keeps falling over time. This can actually happen! Buying high and selling low will cost you ETH!

So if your investment thesis is “long ETH”, you want to hoard ETH, and you’re interested in putting your ETH to work to earn more ETH, but you want to avoid more complex and high-risk strategies. Where should you go to find this income opportunity?

Check out these top 5 opportunities to earn ETH yield using ETH directly with DeFi .

1. Vesper’s ETH Grow Pools

? Estimated APY: 2.31%

What you need to know

• Vesper is a platform that provides user-friendly DeFi products, and its first product is called Grow Pools.

• Vesper’s Grow Pools collect users’ deposits and then invest these deposits into yield strategies (specifically, users’ deposits are invested in third-party DeFi products, mainly for lending and yield farming of various third-party DeFi projects). The interest income generated will be used to “ repurchase more deposit assets in the pool and convert them into passive returns for pool participants.” Both conservative and aggressive strategies are available.

• The idea is that users can deposit ETH into a Vesper ETH Grow Pool and steadily earn more ETH over time. Depositors receive vTokens (such as vETH), and the vETH you hold will track your stake in the Grow Pool, and as buybacks proceed, this stake will grow to represent more ETH.

How to join Vesper’s ETH Grow Pools?

1. Go to app.vesper.finance/eth/pools and connect your wallet.

2. Scroll down, select the “conservative” or “aggressive” ETH Grow Pool and click “Deposit”. Note: The aggressive ETH Grow Pool is a great opportunity to earn a higher 2.31% APY.

3. Enter the amount of ETH you want to deposit and click “Deposit” again.

4. Confirm the transaction on your wallet.

5. That's it! You can track your earnings on your Portfolio page and eventually withdraw your ETH via vETH in the Grow Pool dashboard. Note: A portion of your APY will appear in the form of Vesper Protocol's governance token VSP , which you can claim through the same dashboard.

2. Use Rocket Pool for liquidity staking (rETH)

? Estimated APY: 4.3%

What you need to know

• Rocket Pool is a " staking as a service " (DSaaS) protocol for Ethereum stakers.

• The project allows node operators to stake as little as 16 ETH , while users of its liquidity staking service can stake as little as 0.01 ETH .

• Users who choose to perform liquidity staking will receive Rocket Pool's liquidity staking token rETH after depositing ETH. Therefore, rETH represents the user's staking position, and the value of rETH will grow relative to ETH over time.

How to stake ETH using Rocket Pool?

1. Go to stake.rocketpool.net and connect your wallet.

2. Enter the amount of ETH you want to stake.

3. Click “ Stake ” to complete the deposit transaction on your wallet.

4. Once this deposit transaction is confirmed, you will receive rETH , whose value is designed to grow over time. After that, you can unwind rETH and convert back to ETH at any time using the double arrow button in the middle of Rocket Pool’s staking UI, as shown above.

3. Stake DAO’s Passive stETH Strategy

? Estimated APY 6.2%

What you need to know

• Stake DAO is a non-custodial platform that provides curated DeFi yield strategies.

• The platform's Passive Strategies collect Curve Finance 's LP Tokens (liquidity provider tokens) and invest them in other DeFi protocols (such as Convex Finance) to earn automated returns for depositors . This means that if users want to participate in the Stake DAO strategy, they need to first go to Curve Finance to deposit assets and obtain corresponding LP Tokens, and then deposit the obtained Curve LP Tokens into Stake DAO.

• One of Stake DAO’s more popular strategies is its Passive stETH strategy , which receives LP Tokens from Curve’s stETH pool and earns yield for depositors. (Note: Curve’s stETH pool is an asset pool consisting of ETH and stETH, two assets with similar prices. stETH is the liquidity staking token obtained by users of the liquidity staking protocol Lido after staking ETH).

How to participate in Stake DAO's Passive stETH strategy?

1. Go to the Cuirv stETH pool (curve.fi/steth/deposit), connect your wallet, enter the amount of ETH you want to deposit, and get the corresponding steCRV LP Tokens.

2. Then go to stakedao.org/dashboard/strategies and connect your wallet.

3. Click the “Passive stETH Strategy” icon on the page and enter the number of steCRV LP Tokens you want to deposit on the page that pops up.

4. Click Approve the transaction, followed by a final deposit transaction, and you're done.

5. When you are ready to exit your position, you can use the strategy's " Withdraw " button to unlock all sdsteCRV tokens. After that, you will receive steCRV, which you can then use on the Curve platform to withdraw ETH.

4. Jones DAO’s ETH Vault

? Estimated APY: 10.6%

What you need to know

• Jones DAO is a yield and liquidity protocol based on the Arbitrum network, centered around options trading .

• The Jones DAO protocol simplifies the process of investing in products on Dopex , an options exchange built on Arbitrum. Jones DAO does this through its Jones Vaults , which are actively managed by the Jones DAO team and designed to generate returns through options strategies .

• These Vaults operate on a month -to-month epoch schedule, with deposits and withdrawals only allowed between epochs. Currently, deposits to Jones DAO’s first ETH Vault are closed, but it will reopen on March 25, 2022 (when the current epoch ends).

How to join Jones DAO’s ETH Vault?

When deposit is opened...

1. Transfer ETH to the Arbitrum network by using the “bridge”;

2. Go to jonesdao.io/vaults/ETH and connect your wallet;

3. Enter the amount of ETH you want to deposit;

4. Execute this deposit transaction, after which you will receive jETH representing your assets in that vault.

5. Between epochs, you can convert your jETH back to ETH using the vault’s “Withdrawal” button.

5. Ribbon’s ETH Covered Call Vault

? Estimated APY: 21.7%

What you need to know

• Ribbon Finance is a decentralized protocol for creating crypto structured products such as Theta Vaults that execute automated options selling strategies.

• Ribbon's ETH Covered Call Vault is a strategy that automatically sells call options on a weekly basis. It creates ETH call options on the DeFi options protocol Opyn (at which point option tokens oTokens will be obtained), and then sells oTokens to market makers through the decentralized token auction platform Gnosis Auctions, thereby generating income.

• “ The vault reinvests earnings into the strategy , effectively increasing depositors’ returns over time,” the Ribbon team explained.

How to Join the ETH Covered Call Vault?

1. Go to app.ribbon.finance/v2/theta-vault/T-ETH-C and connect your wallet.

2. Enter the amount of ETH you want to provide, then click “Preview Deposit”, review the key information, and click “Deposit Now”.

3. Complete the transaction in your wallet.

4. After you make your deposit, you will receive r-ETH-THETA tokens, which represent your underlying assets in that vault. When you are ready to close your position, you will use these tokens to get your ETH back.

5. ✋Read this full strategy on Ribbon Finance:

https://newsletter.banklesshq.com/p/how-to-make-money-with-automated?s=w

Summarize

ETH is arguably the most useful currency in the crypto economy.

The outlook looks very bright, so if you can maintain direct exposure to ETH while earning more ETH , that would be great.

The ETH yield opportunities described above are not risk-free, although their risk-adjusted returns are attractive, especially if you believe that the world will increasingly adopt ETH and you want to get as much ETH yield as possible!