Token Flow

Fig 16. Displaying the user flow for earning yield in the wstETH 11x vault.

1. User deposits wstETH into the wstETH 11x vault for shares

2. User burns their wstETH 11x shares for wstETH when exiting

3. wstETH 11x deploys to Lido Protocol by holding wstETH reserves

4. wstETH 11x vault borrows WETH to swap into wstETH for 11x Effective Exposure

5. wstETH 11x shares are worth more wstETH as yield accrues

6. wstETH 11x captures 1x unlevered yield and 10x spread on yield after leverage

7. RebalanceDown triggers the wstETH 11x vault to borrow more WETH from the Spark LP

8. RebalanceUp to sell wstETH into WETH to pay down debt owed to the Spark LP