Ethena Liquid Leveraging on Aave in one transaction

Ethena’s Liquid Leverage allows users to deposit 50% sUSDe and 50% USDe into Aave and earn promotional rewards for USDe in addition to the normal USDe lending rate and sUSDe's native APY.

To become eligible for Liquid Leverage rewards for USDe deposits, users must:

• Supply a roughly 50/50 split of USDe and sUSDe as collateral. The 50/50 split is in regards to the dollar value, not the actual amount of USDe and sUSDe

• Be borrowing USDC, USDT, or USDS

• Complete looping the position at least once

We've been notified by the Ethena team that the split doesn't have to be exactly 50/50 - a small deviation in percentage is allowed.

It's not mandatory that the steps are followed in chronological order, since the main factor is that the resulting position meets all the criteria.

With that in mind, DeFi Saver has created a zap that achieves this in a single transaction, where users can enter with either USDe or sUSDe as collateral:

Show me how:

The first step is to navigate to our Recipe Creator tool.

From there, you'll see the "Ethena x Aave Liquid Leverage" zap:

Clicking the zap will open a pop-up window:

From there - you'll be able to select which asset you want to supply, as well as the debt asset.

By clicking on the "Behind the scenes" tab, you'll see a detailed breakdown of the steps our zap uses to reach the position in a single transaction.

On the "Details" tab, you'll get a preview of what the position will look like before executing the zap:

Once everything checks out - click on "Execute"

This zap contains a sell action which includes a service fee of 0.01%.

Liquid Leverage also addresses the 7-day unstaking cooldown issue for sUSDe users. By maintaining at least half the position in USDe and employing leverage, it creates a loop that keeps a portion of the funds liquid, free from the 7-day cooldown constraint.

The main risk with liquid leverage positions is the unwinding process.

While your position is earning the advertised Net APY before unwinding, if you decide to withdraw and unstake your sUSDe, you'll have a 7-day period during which you're paying borrow APY with a lower amount of sUSDe earning supply APY.

To learn more about the unwinding options for your liquid leverage position, please visit our Knowledge Base article.