How to stake DYDX on pSTAKE to earn an ultra-high return of 141%?

Written by: 2Lambroz

Compiled by: Deep Tide TechFlow

Earn 141% yield on dYdX!

Or earn 125% yield by hedging on perpetual contracts + 12% delta-neutral liquidity staking to earn $DYDX

Explore the step-by-step guide to LSD yields on Cosmos

With more attention on the DYDX application chain, $TIA, and $DYM, why not learn more about liquidity staking in Cosmos?

Summary

pSTAKE Finance is a liquidity staking protocol focused on Cosmos assets.

I have been exploring, as more attention has come to the DYDX application chain, $TIA and $DYM, and I discovered some great yield strategies!

I will introduce step by step how to earn 125% yield on dydx and stkdydx on pSTAKE Finance.

What is Persistence and Liquidity Staking

Persistence is a liquidity staking protocol in Cosmos.

Liquidity staking tokenizes the positions of staked assets, allowing users to maintain liquidity while earning yields.

For example, if you want to stake $DYDX, you would have to wait 30 days to unstake and redeem your position.

But if you stake through Persistence, your staked DYDX position will be stkDYDX, which is the tokenized position of that staked asset.

In simple terms, it allows you to earn staking rewards while maintaining liquidity.

This enables:

• Exiting your staked position without waiting 30 days by directly selling your stkDYDX

• Providing LP and earning DYDX/stkDYDX trading fees

• If stkDYDX is at a discount (not 1:1 with dydx), you can buy stkDYDX and unstake in 30 days to earn the price difference

Persistence offers a range of liquidity staking options, but I focus on $DYDX because its yield is currently the best.

Persistence is the parent company of Pstake Finance and Dexter, and it is a DEX for staked assets.

Strategy Description

• Stake 1/2 of your DYDX into stkDYDX

• Provide LP on Dexter to earn 125% annual yield

• Optional: Short dydx on CEX for an additional 12% annual yield while maintaining delta neutrality

Here are the detailed steps:

1. If you only have assets on EVM, you can use @CCTPMoney to transfer funds to the Cosmos chain, the route must be EVM -> Noble -> Persistence

If not, you can use CEX to send funds to XPRT, then swap to DYDX on Dexter

2. If you used CCTP funds, you now hold USDC, buy DYDX on Dexter, click here to access the site.

3. Liquidity stake half of your DYDX into stkDYDX

4. Add liquidity on Dexter and bond for 7 days to earn 141% annual yield

Bonding means you need to lock your position for 7 days to receive additional emissions $xprt yield (annual yield 125.78%)

What if you are concerned that the price of DYDX might drop?

Hedge it! Also known as a delta-neutral strategy.

Suppose I have 250 DYDX and 250 stkDYDX in LP, which means I have 500 DYDX price exposure.

So if I also short 500 DYDX on CEX, my DYDX price exposure would be 0, as I hold 500 DYDX and short 500 DYDX at the same time!

In reality, because the funding rate has always been positive, your short position will also receive funding payments (if the funding rate remains unchanged).

Interestingly, $STARS from the Cosmos NFT chain by @StargazeZone (the chain where badkids NFT is located) has been proposed to be listed as one of the liquidity staking assets, which could bring some yields.

Conclusion

• If you already hold it, the liquidity staking yield on DYDX is good

• Delta-neutral mining is possible

• It's worth learning more about LST

• Keeping an eye on the persistence ecosystem is always good, as Cosmos SDK assets are gaining attention, such as $TIA, $DYM, etc.