The Stabilize Protocol is a decentralized finance application designed to help keep stablecoins and BTC proxy tokens’ prices stable by using active strategies that arbitrage across multiple exchanges. Users earn from price fluctuations between tokens.
What is staked Ether?
Ethereum 2.0 is coming soon and its beacon chain provides ETH interest to those who decide to send ETH into its contract. The catch is that users must lock at least 32 ETH to be eligible for interest earnings on their deposit and their ETH is locked potentially for years as Ethereum 2.0 continues to develop.
Staked ETH token platforms get around this catch by pooling users deposits together and giving users receipts of their deposits that they will be able to redeem for the locked ETH at a later time when the tokens are unlocked with interest earned. These receipt tokens can be freely traded and serve as a kind of promise for the deposit plus interest at a future point.
The Stabilize Strategy
As there is independent value in both present forms of ETH (WETH) and future forms (AnkrETH, StETH), the Stabilize strategy trades on price fluctuations due to changes in demand between present ETH and future ETH.
Users can enter by simply wrapping their ETH into WETH (via Uniswap), or depositing staked Ether tokens themselves. In this strategy, when deposited, the tokens are considered equal in value to each other.
To redeem your share of tokens back, just unwrap zs-ETH and you will receive a certain amount of ETH type tokens back, in whichever asset has the largest balance first then other assets sorted by their decreasing balance. This means if you deposit 10 WETH to get zs-ETH, when you redeem your zs-ETH back for ETH type tokens, if AnkrETH has the largest balance, you will redeem AnkrETH first; however, the total quantity of tokens redeemed will never be smaller than what you put in. So you will get back at least 10 ETH type tokens.
Trade executors can earn a percentage profit off each trade by timing the trade at the right time including covering some of their gas costs. The expectedProfit(bool inWETHForExecutor) function includes a boolean that allows executors to see their WETH profit from the next prospective trade, instead of total profit (in tokens) for the trade.
The APY posted on the wrapper is an estimate based on historic performance of the strategy. The strategy doesn’t earn continuously. It only gains when there is trading activity. This means if you wrap into a strategy and unwrap before a trade takes place, the balance you redeem will be the same as what you put in, regardless of how long you were in the strategy.
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