DeFi Integration

Users participating in DeFi with rsETH will have the opportunity to earn Kelp Miles and EigenLayer points along with additional yields from DeFi opportunities. Kelp will also be incentivizing opportunities with boosted Kelp Miles to provide users with extra benefits of participating in DeFi.

Let’s understand the available DeFi opportunities and what are the benefits of participating in these activities.

Current DeFi Integrations:

Pendle
Uniswap
Curve
Balancer

Pendle

Pendle is a permissionless yield-trading protocol where users can execute various yield-management strategies. For rsETH, there are 4 main positions that users can engage with:

PT-rsETH PT position is the principal token representing only the principal at maturity. This strategy works by depositing your rsETH into the Pendle protocol for a fixed duration and earning a fixed yield at maturity. Based on the exchange rate, you receive PT rsETH at a discount, and at maturity, you get 1 ETH worth of rsETH for every PT rsETH, which becomes your yield. However, you will not earn EigenLayer points and Kelp Miles with this position. You are simply locking in for a fixed yield. An important point to note is that PT-rsETH can be sold anytime before maturity

YT-rsETH
YT position is the yield token representing the yield of the underlying asset until maturity. Every YT-rsETH will give all the yield and points generated by 1 ETH worth of rsETH to you until pool maturity. The price of YT is subject to market rates depending on how the market values it.

For example, if 1 rsETH trades for 10 YT-rsETH, then for every YT-rsETH, users earn Miles and Points equivalent to 10 ETH worth of rsETH.

You can speculate on the price of YT-rsETH based on factors like Long Yield APY, EigenLayer points, and Kelp Miles. Kindly DYOR.

LP-rsETH
The LP position consists of PT-rsETH + SY-rsETH. SY portion earns yield. This is also single asset exposure, meaning IL is minimal. With this, you get the following benefits -
1. EigenLayer Points
2. Kelp Miles (Boosted)
3. Staking / Restaking yield
4. PT rsETH fixed yield
5. Swap fees
6. Pendle Incentives
There are 2 ways of interacting with this strategy.
1. Keeping Zero-Price Impact mode disabled: As LP rsETH is a PT/SY position, in this mode a part of SY is distributed into PT and YT and then the YT is sold for the amount equivalent to PT/SY being added to the pool. For example, if 1 SY and 1 PT are added, then 1 YT will be sold. As your YT holdings are sold, the Kelp Miles and points you earn also reduce. You will receive Kelp Miles and EigenLayer points based on the ratio of SY in the pool.
2. Keeping Zero-Price Impact mode enabled: Your YT is not sold in this mode. So, your position receives ~3x Kelp Miles and ~1x EigenLayer points. There is no need to deposit in the liquid locker. However, adding earned LP to the liquid locker would allow users to gain more points, thanks to the boosting.
To understand the more details, check out the docs on Pendle here
Liquid lockers rsETH is live on 2 liquid lockers:
1. Penpie
2. Equilibria
If you do not opt for Zero-Price Impact mode, you can deposit your LP position into a liquid locker and earn more Kelp Miles and EigenLayer Points with the Pendle boost. Penpie: Click here to deposit

Equilibria:

Uniswap

Users earn 3x Kelp Miles and EigenLayer points for providing liquidity to the rsETH <> ETHx pool

Steps to Add Liquidity:

Stake your preferred LST with on the Kelp dApp and mint rsETH
Go to the DeFi tab and click the link that takes you directly to the Uniswap pool.
Once on the Uniswap pool page, connect your wallet and deposit the amount of rsETH and ETHx that you would like in the range of your choice. Your position within range will continue to earn Kelp Miles and EigenLayer points.

Proportional Earning of Rewards:

Kelp Miles will be distributed based on the overall TVL of the pool. In the rsETH / ETHx pool, the Kelp Miles will be allocated to the pool for the overall rsETH + ETHx equivalent of rsETH. Users will get Miles proportional to their LP positions.
EigenLayer Points will be distributed based on the rsETH available in the pool. In the rsETH / ETHx pool, the EigenLayer points will be allocated to the pool based on the rsETH amount in the pool. Users will then get EL points proportional to their LP positions

Example -

Pool Composition: 30 rsETH, 70 ETHx

Price ratio (rsETH/ETHx): 1:1

Contribution by wallet: 5 rsETH, 5 ETHx

LP Share: (5+5)/100 = 0.1

Kelp Miles per day = [0.1]*[100]*[10,000*3] = 300,000

EigenLayer Points per day = [0.1]*[EigenLayer points received by Pool for 30 rsETH]

LP positions also depend on whether the position is in range. So, users providing liquidity within range will get a higher allocation of Miles and points.

Balancer