👀 Overview

“Sapphire Tartelette à la Base” is a recursive staking strategy designed to exponentially increase yields on your ETH. Built on the Base blockchain, this strategy utilizes Morpho to create a looping mechanism, where wstETH collateral is repeatedly staked and borrowed against ETH to maximize yield potential.

🍞 Strategy Breakdown

• Recursive Staking: Using wrapped staked ETH (wstETH) as collateral, this strategy borrows ETH on Morpho. Borrowed ETH is then staked back into wstETH, creating a loop that amplifies yield potential.

• Morpho Protocol on Base: Morpho’s peer-matching model improves efficiency in the recursive staking process, offering more favorable borrowing and lending rates. Base’s low fees further streamline the cost of multiple interactions.

• Exponential Yield: This loop of borrowing and re-staking enables exponential yield growth on wstETH, setting Sapphire Tartelette apart as a high-yield, ETH-based strategy, with risk management mechanisms in place to make sure you won’t get liquidated.

🔵 How It Works

1. Initial Deposit of ETH: Deposit ETH on BakerFi’s Sapphire Tartelette à la Base strategy.

2. Recursive Borrowing and Staking: BakerFi swaps your ETH for wstETH and uses Morpho to repeatedly borrow ETH against the wstETH collateral. Each borrowed amount is converted back into wstETH, which is then used as additional collateral to repeat the process.

3. Yield Accumulation: Each loop compounds the yield potential of the wstETH, creating an amplified return over time.

🔑 Key Advantages

• High Yield on your ETH: Recursive staking multiplies yield, offering significantly higher returns compared to single-cycle staking.

• Efficient Costs on Base: Base’s low transaction fees make recursive strategies feasible, maximizing yield without heavy fees.

• Optimized ETH Lending: Morpho’s peer-matching further improves lending and borrowing rates, increasing the efficiency of each recursive cycle.

🛟 Risk Management

• Smart Contract Security: The strategy relies on both Morpho and Base, which undergo regular audits. BakerFi adds additional security checks to safeguard recursive processes.

• Recursive Leverage: While this amplifies yield, it also introduces risks associated with leverage, including potential fluctuations in ETH’s market value relative to wstETH. Our Liquidation Protection mechanism reduces that risk for you, by automatically rebalancing your positions once the Loan-To-Value (LTV) parameter is above our strategy configuration.

👨‍🍳 Conclusion

Sapphire Tartelette à la Base offers a powerful, high-yield strategy for ETH by leveraging recursive staking on Base. Through Morpho, BakerFi enables you to access exponentially higher returns on staked ETH with minimal hands-on involvement.

Explore this strategy on BakerFi to maximize your DeFi potential with advanced, efficient staking.