optimizing-staking-rewards

# Optimizing Staking Rewards ## Overview This skill analyzes staking opportunities across multiple proof-of-stake blockchains and liquid staking protocols. It compares APY/APR, calculates net yields after fees, assesses protocol risks, and provides optimization recommendations for maximizing staking returns. Key capabilities: - Compare native and liquid staking options across chains - Calculate true APY after protocol fees and gas costs - Assess risk factors for each staking protocol - Optimize portfolio allocation across staking opportunities - Project returns over custom time horizons ## Prerequisites Before using this skill, ensure you have: - Python 3.8+ installed - `requests` library for API calls (`pip install requests`) - Network access to DeFiLlama APIs - Basic understanding of staking concepts (APY, validators, unbonding) Optional: - CoinGecko API key for higher rate limits on price data ## Instructions ### Step 1: Compare Staking Opportunities To compare staking options for a specific asset: ```bash python {baseDir}/scripts/staking_optimizer.py --asset ETH ``` This fetches current rates from DeFiLlama and displays: - Protocol name and type (native vs liquid) - Gross APY (advertised rate) - Net APY (after protocol fees) - Risk score (1-10, where 10 is safest) - TVL and lock-up period ### Step 2: Analyze with Position Size For gas-adjusted yields based on your stake amount: ```bash python {baseDir}/scripts/staking_optimizer.py --asset ETH --amount 10 ``` Adding `--amount` calculates: - Effective APY accounting for gas costs - Projected returns (1M, 3M, 6M, 1Y) - Gas cost as percentage of position ### Step 3: Optimize Existing Portfolio Input current positions for optimization recommendations: ```bash python {baseDir}/scripts/staking_optimizer.py --optimize \ --positions "10 ETH @ lido 4.0%, 100 ATOM @ native 18%, 50 DOT @ native 14%" ``` The optimizer will: - Calculate current total yield - Suggest higher-yield alternatives - Show projected improvement - Warn about switching costs ### Step 4: Compare Specific Protocols For head-to-head protocol comparison: ```bash python {baseDir}/scripts/staking_optimizer.py --compare --protocols lido,rocket-pool,frax-ether ``` Compare metrics: - APY side-by-side - Fee structures - Risk profiles - Liquidity depth ### Step 5: Detailed Risk Assessment For in-depth protocol analysis: ```bash python {baseDir}/scripts/staking_optimizer.py --asset ETH --detailed ``` Shows for each protocol: - Audit status and age - Time in production - Validator diversity - Historical performance - Slashing incidents ### Step 6: Export Results Save analysis for further use: ```bash # JSON output python {baseDir}/scripts/staking_optimizer.py --asset ETH --format json --output staking.json # CSV for spreadsheets python {baseDir}/scripts/staking_optimizer.py --asset ETH --format csv --output staking.csv ``` ## Output ### Quick Comparison Table ``` ============================================================================== STAKING REWARDS OPTIMIZER 2025-01-15 15:30 UTC ============================================================================== STAKING OPTIONS FOR ETH ------------------------------------------------------------------------------ Protocol Type Gross APY Net APY Risk TVL Unbond ------------------------------------------------------------------------------ Frax (sfrxETH) liquid 5.10% 4.59% 7/10 $450M instant Lido (stETH) liquid 4.00% 3.60% 9/10 $15B instant Rocket Pool liquid 4.20% 3.61% 8/10 $3B instant Coinbase cbETH liquid 3.80% 3.42% 9/10 $2B instant ETH Native native 4.00% 4.00% 10/10 $50B variable ------------------------------------------------------------------------------ Ranked by risk-adjusted return (Net APY × Risk Score / 10) ============================================================================== ``` ### Optimization Report ``` ============================================================================== PORTFOLIO OPTIMIZATION ============================================================================== CURRENT PORTFOLIO ------------------------------------------------------------------------------ Position APY Annual Return 10 ETH @ Lido 3.60% $720 100 ATOM @ Native 18.00% $3,600 50 DOT @ Native 14.00% $1,400 ------------------------------------------------------------------------------ Total Portfolio: $25,000 Blended APY: 22.88% Annual: $5,720 OPTIMIZED ALLOCATION ------------------------------------------------------------------------------ Recommendation APY Annual Return Change 10 ETH → Frax 4.59% $918 +$198 100 ATOM → Keep 18.00% $3,600 $0 50 DOT → Keep 14.00% $1,400 $0 ------------------------------------------------------------------------------ Optimized Annual: $5,918 Improvement: +$198 (+3.5%) IMPLEMENTATION 1. Unstake 10 ETH from Lido (instant - liquid) 2. Swap stETH → ETH on Curve (0.01% slippage est.) 3. Stake ETH for sfrxETH on Frax Finance 4. Est. gas cost: ~$15 (current gas: 25 gwei) ============================================================================== ``` ### Risk Assessment Detail ``` RISK ASSESSMENT: Lido (stETH) ------------------------------------------------------------------------------ Overall Score: 9/10 (Low Risk) Breakdown: - Audit Status: ✓ Multiple audits, latest 6 months ago (+2.0) - Time in Production: ✓ 3+ years live (+2.0) - TVL Size: ✓ $15B+ locked (+2.0) - Protocol Reputation: ✓ Industry standard, DAO governance (+1.5) - Validator Diversity: ✓ 30+ validators (+1.5) Considerations: - Largest LSD by market share (potential centralization concerns) - stETH occasionally trades at slight discount to ETH - 10% fee on staking rewards Historical: - No slashing events to date - stETH peg maintained through market stress - Consistent validator performance ------------------------------------------------------------------------------ ``` ## Error Handling See `{baseDir}/references/errors.md` for comprehensive error handling. Common issues: - **API timeout**: Cached data used, shown with warning - **Invalid asset**: Lists supported assets - **Rate limited**: Automatic retry with backoff - **No data found**: Falls back to known protocol list ## Examples ### Example 1: Quick Comparison ```bash python {baseDir}/scripts/staking_optimizer.py --asset ETH # Shows all ETH staking options ranked by risk-adjusted return ``` ### Example 2: Large Position Analysis ```bash python {baseDir}/scripts/staking_optimizer.py --asset ETH --amount 100 --detailed # Shows gas-adjusted yields for 100 ETH with full risk analysis ``` ### Example 3: Multi-Asset Research ```bash python {baseDir}/scripts/staking_optimizer.py --assets ETH,SOL,ATOM --format csv # Compares staking across multiple assets, exports to CSV ``` ### Example 4: Portfolio Optimization ```bash python {baseDir}/scripts/staking_optimizer.py --optimize \ --positions "50 ETH @ lido 3.6%, 500 SOL @ marinade 7.5%" # Analyzes current positions and suggests improvements ``` ### Example 5: Protocol Deep Dive ```bash python {baseDir}/scripts/staking_optimizer.py --protocol rocket-pool --detailed # Full analysis of Rocket Pool including validator metrics ``` ## Resources - **DeFiLlama Yields**: https://defillama.com/yields - Primary data source - **StakingRewards**: https://www.stakingrewards.com - Native staking reference - **Lido**: https://lido.fi - Largest liquid staking protocol - **Rocket Pool**: https://rocketpool.net - Decentralized ETH staking - **Frax Finance**: https://frax.finance - sfrxETH liquid staking - **Marinade**: https://marinade.finance - Solana liquid staking ## Important Notes - APYs are variable and change based on network participation - Historical yields do not guarantee future returns - This tool provides information, not financial advice - Always DYOR (Do Your Own Research) before staking - Consider your risk tolerance and liquidity needs