Try Quests to earn cryptoETH Derivatives
Overview
One way to generate passive income while holding cryptocurrencies is staking. Cryptocurrency holders can stake their assets and through validators contribute to proof of transactions and get rewards. This can be possible only in blockchains that are based on 'proof of stake'. However, major blockchains such as Bitcoin and Ethereum are based on 'proof of work' staking meaning that they do not offer reward through staking.
Yet, in addition to direct staking which requires large amount of ETH to stake, few platforms provided solutions that make micro ETH staking possible. On these platforms once users stake ETH, they will receive a token in 1:1 rate. This token can be used in decentralized finance platforms for generating passive income.
Approaching the so-called 'Ethereum Merge' and Ethereum’s switch from PoW to PoS put these platforms in the spotlight.
This dashboard focuses on the liquid staking ETH derivates from ankr, rocketpool and lido (aETH , rETH and stETH ) and investigates what ontributes to the price volatility for these tokens? \n
Methodology
To see what contributes to volatility of ETH derivatives, the effect of three factors will be examines:
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ETH price
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The volume and number of swap
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The volume of minting
We first examine how the price of ETH derivatives’ token is related to ETH price. Then we will try to explain what may contribute to deviation of 1:1 rate for each of the ETH derivatives (aETH, rETH and stETH). For this we will explore the correlation between the ETH price, the volume and number of swap and the volume of minting with the rate of ETH derivates price / ETH price. In theory this should be 1.
The first graph in this section shows how the price of ETH as well as ETH derivates have changed over time.
We can see that their price go up and down hand in hand. However, in many days there is difference between ETH price and other ETH derivates token’s price and the rate is not always 1 as the second graph demonstrates.
Lido stETH has always fluctuated around 1, however, in the recent bear market, it sometimes lost its peg to ETH and even fell to .93.
ETH derivatives peg rate is measured by dividing ETH deviate price by ETH price.
Three scatter plots here show the correlation between peg rates and ETH price.
We can see that:
- when the price of ETH is between 2500 and 3500 USD it is more likely that stETH experience the 1:1 rate. Also in low prices the rate would be at the lowest level of 0,94.
- aETH is almost always in a lower rate of 1:1. However, in the ETH price more than 3500 it is less volatile than between 2500 and 3500.
- rETH is almost always in a higher rate of 1:1. However, in the ETH price more than 3500 it is less volatile than between 2500 and 3500.
In this section I used number of swaps to account for ETH derivatives volatility.
Graph below shows how the number of swaps has changed over time for each ETH derivatives. We can see that stETH has a largest share of ETH derivative in the past months. rETH swaps has recently grown.
The data also shows that the number of swaps for and from rETH has decreased since a year ago.
Graphs below show the correlation between ETH derivatives number of swaps and derivatives/ETH price rate.
Contrary to aETH for stETH and rETH the higher the number of daily swaps led to more likelihood of depegged.
Once one stake Ethereum, will receive a representative token. Therefore we can see minting rETH, stETH and aETH against in turn ETH staking on Rocket Pool, Lido and ANKR platforms.
The graphs below show the daily number of minters as well as amount of ETH minted.
The correlation analysis does not show any relationship between mints and price.