Bitmex now allows traders to wager on the daily value of Ethereum blockchain staking rewards.
According to a blog post, the exchange has developed a derivative dubbed the ETH staking yield swap (ETHYLD). It allows traders to go long or short on the daily staking yield generated by the Lido Finance liquid staking protocol. Traders can use up to 2x leverage on their trades.
Every day throughout the life of an ETHYLD contract, two interest rates are “swapped”:
The floating rate will be determined by the variable yield generated by the Lido Finance validator pool. Lido users receive a stETH token for every ETH invested. Every day at 12:00 UTC, a rebase occurs, during which staking rewards are added to the amount of stETH in a wallet.
The fixed rate is a trader’s best prediction of the average daily ETH staking yield from the contract’s commencement until maturity. It is the rate on which traders speculate, and it will be an annualized rate.
ETHYLD traders, like all other crypto derivative contracts on BitMEX, can take a leveraged position (i.e., trade ETHYLD with up to 2x leverage). Furthermore, traders can keep a position as long as they assign enough margin to meet the maintenance margin requirement; otherwise, the trader will be liquidated.
There are, however, numerous significant distinctions between the ETH staking yield swap and other crypto derivatives listings. The primary distinction is that traders on an ETHYLD contract Pay or Receive the set rate rather than Buy or Sell.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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