Wave 2: Hyperdrive Now Supports Renzo’s ezETH and Morpho’s USDe/DAI as Yield Sources

As YieldFest rolls on, we’ve got more news to celebrate! Last week, we introduced the rETH and sUSDe/DAI integrations, and today we’re excited to announce two major new additions to the platform: support for ezETH from Renzo and Morpho’s USDe/DAI as yield sources on the Hyperdrive Protocol (developed by DELV and this instance operated and managed by the Element DAO). These integrations mark another milestone in the ongoing mission to deliver the most straightforward, wide-ranging, and flexible yield opportunities across the DeFi space.

“We believe these integrations will provide users with valuable opportunities to grow their assets and participate in the newest innovations coming out of the DeFi ecosystem,” said Charles St. Louis, CEO of DELV. “Whether you’re a seasoned trader or a newcomer, supporting ezETH and USDe/DAI on Hyperdrive opens new doors for yield generation and financial growth.”

What is ezETH?

ezETH is a liquid restaking token within the Renzo Protocol, and serves as the interface to the EigenLayer ecosystem. ezETH secures Actively Validated Services (AVSs) to generate both staking and re-staking rewards. By leveraging ezETH, users can now unlock even greater earning opportunities while maintaining the flexibility and security that Hyperdrive provides.

Integrating ezETH adds more depth to the Hyperdrive AMM’s liquidity pools, providing more options for yield. The process is straightforward, simple, and intuitive: Users can easily convert their ETH or Liquid Staking Tokens (LSTs) to ezETH and get access to new yield earning opportunities through Hyperdrive.

How to get started with ezETH on Hyperdrive

If you’re a liquidity provider, using ezETH is simple. Here’s what you can do:

1. Acquire ezETH by converting your ETH or LSTs to ezETH through the Renzo Protocol, or acquire ezETH through Uniswap, Matcha, CoW Swap, or other AMMs.
2. Access the Hyperdrive app.
3. Deposit your ezETH by navigating to the LP tab.
4. Earn yields through Hyperdrive's optimized liquidity pools.

And if you’re a trader, here’s how it all works:

1. Acquire ezETH by converting your ETH or LSTs to ezETH through the Renzo Protocol, or acquire ezETH through Uniswap, Matcha, CoW Swap, or other AMMs.
2. Access the Hyperdrive app.
3. Deposit ezETH on Hyperdrive.
4. Open a long position at a fixed rate or a short position at a variable rate.

Both the Hyperdrive Protocol and the Renzo Protocol prioritize security, helping ensure that users' assets are protected. The decentralized validation of ezETH adds an extra layer of security and trust to the ecosystem.

What is USDe/DAI?

USDe is a crypto-backed synthetic dollar designed with the goal of providing scalability, stability, and a native yield. In this new integration with Hyperdrive, USDe will function as collateral for the Morpho market, and users will supply that market using DAI. Morpho is a trustless and efficient lending primitive that allows users to pursue their strategies to generate returns for staked assets and find opportunities for liquidity providers.

DAI is a decentralized stablecoin created by the MakerDAO protocol that’s also pegged to (but not backed by) the U.S. dollar, and works to maintain its peg through an over-collateralization system and decentralized governance by MKR token holders.

How to Get Started with USDe/DAI on Hyperdrive

USDe will serve as the collateral for the Morpho market and the Hyperdrive Protocol supplies DAI to that market. That means you only need DAI to participate, and it’s a simple process.

If you want to provide liquidity, here’s how it works:

1. Acquire DAI by purchasing or borrowing.
2. Access the Hyperdrive app.
3. Deposit DAI on Hyperdrive by navigating to the LP tab.
4. Earn yield with DAI staked on Hyperdrive. You’ll gain returns from staking and trading fees.

And if you’re a trader, here’s what you can do:

1. Acquire DAI by purchasing or borrowing.
2. Access the Hyperdrive app.
3. Deposit DAI on Hyperdrive.
4. Open a long position at a fixed rate or a short position at a variable rate.

We’re continuing to deliver great new opportunities for liquidity providers and traders–plus YieldFest is far from over! We’ve got plenty of new integrations to roll out in the next few weeks, so stay tuned and come celebrate with us.

Missed our earlier posts? Check out Part 1 to learn about the rETH and sUSDe/DAI integrations, and take a look at our YieldFest kickoff announcement for more details (including our role as a non-exclusive service provider to the Element DAO).

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Note: This blog post is general in nature and for informational purposes only. It is not legal, tax, investment, financial or other advice, nor is it a comprehensive or complete statement of the matters discussed. It is not a recommendation of an investment strategy and should not be used as the basis of any investment decision.

All transactions and investments involve risk, and past performance does not guarantee future results. Certain complex strategies carry additional risk and are not appropriate for all users. As with any DeFi or crypto position, you may incur losses. You alone are responsible for evaluating the benefits and risks associated with any decision to use Hyperdrive and the risks or concerns with any underlying yield source.

Hyperdrive is not currently available in certain jurisdictions, such as the USA and the UK.