Delta Neutral Strategy
This strategy uses ZonaLoop to create 3x leveraged exposure to wstETH staking yields while remaining delta-neutral to ETH price movements.
The Setup
The user has 10 wstETH (~$30,000) and wants 3x exposure to staking yields without betting on ETH price direction.
The Execution
Flash Loan: Protocol temporarily borrows 20 wstETH (user provides 10, flash loan provides 20, making up 30 wstETH in total)
Deposit: 30 wstETH deposited as collateral in ZonaLend
Borrow: Protocol borrows 20 WETH against your collateral
Repay: 20 WETH immediately repays the flash loan
Your Final Position
Collateral: 30 wstETH earning ~4% staking APR = $1,200 per year
Debt: 20 WETH borrowed at ~3% APR = $600 per year cost
Net Yield: $600 per year on your original $30,000 = ~2% net yield on principal
Leverage: 3x
Price Exposure: Neutral (if the price of ETH goes up, collateral and debt move together)
| Metric | Just Holding (10 wstETH) | ZonaLoop (3x Leverage) |
|---|---|---|
| Collateral Value | $30,000 | $90,000 (30 wstETH) |
| Debt Value | $0 | $60,000 (20 WETH) |
| Net Exposure | $30,000 | $30,000 |
| Gross Yield | $1,200 per year | $3,600 per year |
| Borrow Cost | $0 | $1,800 per year |
| Net Annual Yield | $1,200 | $1,800 |
| Effective APY | 4.0% | 6.0% |
Key Insights
The strategy is "delta neutral" because both your collateral (wstETH) and debt (WETH) have the same price exposure to ETH. wstETH earns staking rewards (~4% APR) while WETH does not. By borrowing WETH against wstETH, you capture the yield difference (the "carry"), and leverage amplifies this carry trade, turning 4% staking yield into 6% net yield.