dWEMIX

DELTAFi Delta WEMIX

Product Specifications

Ticker: dWEMIX

Name: DELTAFi Delta WEMIX

Contract: 0x531e6Abe1ad0c8313ad7c8f7ad96b8e70c56164E

Index Price: Outstanding dWEMIX / WEMIX held by Vault

Denominator: Wrapped WEMIX (0x7D72b22a74A216Af4a002a1095C8C707d6eC1C5f)

Audit: https://skynet.certik.com/projects/deltafixyz

Description

dWEMIX is the first dETP launched by the DeltaFi team on the WEMIX3.0 blockchain. dWEMIX Vault operates on a single strategy called Leverage Staking.

Strategy: Leverage Staking

The strategy uses WEMIX.Fi lending market and Liquid Staking to establish a leveraged position of stWEMIX. The process involves using initial capital of WEMIX to mint stWEMIX through Liquid Staking on WEMIX.Fi, depositing the stWEMIX into WEMIX.Fi’s lending market, and borrowing WEMIX against the stWEMIX deposit. The borrowed WEMIX is then staked through Liquid Staking to mint additional stWEMIX. This process is repeated to establish a target leverage.

By maintaining a leveraged position of stWEMIX with borrowed WEMIX, the Vault effectively earns approximately 1.5 times more than the average WEMIX staker. The primary source of yield for the dWEMIX Vault is derived from Wonder Staking. The profitability of the Vault is contingent upon ensuring that borrowing costs (interests paid on borrowed WEMIX) remain lower than the yield earned from Wonder Staking, which may vary depending on market circumstances.

Value of dWEMIX

dWEMIX = Principal + Staking Rewards + Spread + Swap Fees - Interest 
+ Principal: WEMIX and stWEMIX Vault owns without borrows
+ Staking Rewards: Staking rewards from stWEMIX holdings
+ Spread: Spread earned on liquidity provided to dWEMIX-WEMIX pool
+ Swap Fees: Fees earned on liquidity provided to dWEMIX-WEMIX
- Interest: Interest paid on borrowed WEMIX

By breaking down the value of dWEMIX, we can come to an understanding that dWEMIX is fundamentally better alternative to just holding WEMIX for anyone taking a long bet as long as the borrowing costs are lower than staking rewards. By leveraging composability, we're able to construct a whole new product that allows users to hold on to WEMIX with better yield than native staking.