Lido V3 & Everstake: Institutional Market-Neutral Yield Strategies with stVaults
Product Overview
Everstake is building a product using stVaults that enables institutional investors to get more yield on staked ETH without increasing market exposure through borrowed funds and simultaneously hedges price sensitivity with perpetual futures and funding arbitrage income.
Initial Approach & Limitations
Traditional staking setups did not offer the customizability and separation of responsibilities needed to build a product suitable for institutional users. Without clear boundaries between operational control (node operators) and risk management (strategy curators), it was difficult to enforce policy rules, implement oversight mechanisms, or adapt strategies dynamically in response to market conditions.
Everstake needed infrastructure that could separate staking operations from risk policy enforcement, and allow for transparent, real-time management of complex position structures.
Why stVaults?
- Separation of roles: Node operators manage staking, while risk curators independently define and enforce risk parameters like LTV thresholds, liquidation conditions, and exposure limits.
- Customizable risk policy enforcement: The system allows full control over strategy logic, enabling real-time monitoring and adjustments to meet institutional-grade standards.
Integration and Security Approach
The product is implemented through smart contracts that execute strategy with minimal manual intervention. This ensures consistency, reliability, and efficiency in trade execution while reducing operational risks.
Each stVault strategy is monitored and adjusted through a dedicated risk management platform managed by the Risk Curator. This system actively tracks funding rates, position sizes, and LTVs, and performs automated rebalancing in alignment with a defined risk policy. The strategy aims to extract market-neutral yield from staking rewards + funding arbitrage, while avoiding negative carry and liquidation risks.
Expected Outcomes
With stVaults, Everstake can now offer:
- Staking product with higher rewards and reduced risk.
- Institutional-grade control and compliance through smart contract automation and role separation.
- A foundation for scalable, transparent, and customisable staking products targeted at risk-conscious investors.