20% APY in real yield + incentives on WETH/USDC Base @GammaSwapLabs
Where art thou liquidity providers? 🤔
.@GammaSwapLabs has launched one yield token so far...gETH on Base. The vault provides liquidity into Uniswap V3 WETH/USDC, borrows from the ETH/USDC GammaPool to hedge the IL and provides users with synthetic ETH exposure.
It is whitelisted to not pay fees and instead shares fees with the pool. Previously it was sharing half of the yield (deleveraged) but now the fees are shared dynamically based on utilization.
Due to the demand for the yield tokens, the ETH/USDC constant product GammaPool is paying 16% in real yield and 43% in esGS incentives.
The idea is to slowly taper off the incentives and mostly rely on the fees from yield tokens.
We just implemented the dynamic fee change today so DeFi Llama will need a bit to propogate the new yield data but you can see the trend is for the yield to increase.
16% real yield is quite competitive given the IL risk. If ETH goes up 50%, your IL would be -2% and it would only take 6 weeks to make up for that loss (not including incentives)!
Stay tuned for more yield tokens like gBTC on Base coming soon!
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