How Ethereum’s merge may impact lenders and borrowers
Dos and Don’ts
The ETH merge is a few days ahead, "what should I do?" is a frequently heard question.
here are some thoughts of possible strategies in a spectrum of risk you can consider according to your own risk profile anon
— Marc "Aavechan.lens" Zeller
1) DO NOTHING.
safest play.As a user you don't have to prepare for the merge, it's seamless.
EVERYONE telling you u should do x and y and "download this merge-ready version of MM" is a scammer trying to get your money.
No exception.
Doing nothing is a valid strategy
— Marc "Aavechan.lens" Zeller
2) for EthPoW play,
Stay out of CeFi that will likely not support ethPoW (unsure but likely coinbase, kraken won't support ethPoW as examples) otherwise no ethPoW coins for u anon.
but don't leave CeFi if you don't know how to secure your wallet.
— Marc "Aavechan.lens" Zeller
but anon, if you wanna 2), do it now.
it's VERY likely CEXs will hit the pause button ahead of a major upgrade of deposits/withdraws.
if you wanna get in or out, do it before the doors are closed.
— Marc "Aavechan.lens" Zeller
3) Deposit your ETH in mainnet DeFi
during the gold rush, the maths of profits/risk largely favored the tools shops.
Sell the picks & shovels by providing liquidity (>9% ETH yield on @AaveAave now) and let the degens take risks for you while u cash in the interest they pay.)
— Marc "Aavechan.lens" Zeller
4) If you're a long-term investor in ETH, monitor StETH.
there's very likely volatility for Staked ETH in the next few days as rising ETH borrow rates currently make degen stETH/ETH leverage loop in the red and some traders wind down to avoid liquidation
— Marc "Aavechan.lens" Zeller
as liquidity for stETH is not infinite, some depeg as seen during celsius events might happen.
The current discount is 3.5%, which is almost a year of staking reward for "free" if you can wait 6-9 months for an unstacking upgrade.
— Marc "Aavechan.lens" Zeller
For the patient investors, stETH is quite safu, and if we reach a larger discount, buying stETH is a very likely superior trade than ethPoW and much safer.
— Marc "Aavechan.lens" Zeller
5) monitor "exotic" liquid staking tokens if you're more risk-friendly.
cbETH (coinbase) is at a high discount now
but there's plenty, many legit, some shitty, DYOR.— Marc "Aavechan.lens" Zeller
6) Markets are efficient in textbooks, but the reality is far from that.
if you wanna borrow ETH to do the EthPoW play, monitor L2, Alt-L1 liquidity.
ETH cost you 23% on Aave mainnet to borrow, but only 1.92% on Aave arbitrum.
— Marc "Aavechan.lens" Zeller
if you're degen but safu u can even borrow on an L2 and deposit on aave ETH to get sweet arb yield but none of the EthPoW risks.
if markets learn to be efficient, you still have the ETH and can wind down the trade.
— Marc "Aavechan.lens" Zeller
"Wait marc! u gave us 6 strategies but none actually use the EthPoW chain?"
that's right anon. the PoW chain shitshow is already written, only MEV bots will be able to be included in blocks during the first hours.
only delusional ppl think they will be able to profit onchain. pic.twitter.com/kmN0EJAx5s
— Marc "Aavechan.lens" Zeller
Source: https://www.cryptopolitan.com/best-twitter-threads-of-the-day-september-6/