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siddhant
@siddhant98
61.5% APY on ETH Restaking? 🤔 Platform: Contango 🤝 Ethereum Contango’s ezETH/wstETH gives 13.8x exposure to $ezETH (6.81% APY) using $wstETH as borrow. But the buffer before liquidation is just 2.36%. This isn’t passive income. It’s a high-stakes looping trade. Let’s break the risk 👇
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siddhant
@siddhant98
Liquidation If $ezETH Drops 2.36% vs $wstETH 🧨 Factors influencing their price differential: 📏 ezETH/wstETH spread = 0.6% on Uniswap 📌 ezETH's higher yield creates price premium.​ 💎wstETH trades deeper, stable market (2/3)
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siddhant
@siddhant98
Even Small Dislocations can Nuke Your Stack 🌋 🧪 ezETH markets are ~75% smaller than wstETH. 💣Thinner liquidity = higher price impact under stress. ⚠️ Spread alone eats ~¼ of your liquidation range At 13.8x leverage, even a routine unwind in ezETH can push the peg just enough to get liquidated. If you're in, track the spread. Exit fast if it widens. (3/3)
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