Ribbon Finance
  • Introduction to Ribbon Finance
  • Aevo
  • FAQ
    • General
    • DOV Deposits
    • DOV Withdrawals
    • DOV Trading and options
    • Ribbonomics
  • Dune dashboards
  • Contribute
  • Security
  • Ribbon Theta Vaults
    • Introduction to Theta Vaults
      • Strike Selection and Expiry
      • Options Architecture
      • Options Settlement
      • Auctions
      • Risk profile
      • Fees
    • Theta vaults architecture
    • User guides
      • How to deposit
      • How to withdraw
      • How to pause and resume
      • How to stake, unstake vault shares and claim rewards
      • How to transfer vault positions
      • How to participate in Paradigm Auctions
      • How to redeem oTokens
  • RIBBON EARN
    • Introduction to Ribbon Earn
    • Ribbon Earn USDC
      • Risk-Free Rate
      • Twin win strategy
      • Vault specifications
      • Eligibility
      • Fees
    • Ribbon Earn stETH
      • What is a dolphin strategy?
      • Vault specifications
      • Risk profile
      • Fees
  • RIBBON LEND
    • Introduction to Ribbon Lend
      • Yields from unsecured lending
      • No lockups
        • Pool status
        • Default
      • Off-chain enforcement / credit underwriting
      • Built-in insurance
      • Fees
  • ribbon treasury
    • Introduction to Ribbon Treasury
      • Why Ribbon Treasury?
      • Partners
      • How to get involved
  • Ribbonomics
    • Overview and RBN tokenomics
      • Vote-Escrowed RBN
      • Fee Collection and Distribution
      • Liquidity Gauges and RBN Emissions
      • Gauge Weight Voting
      • Bribes
        • Guide to Boost Bribing
          • For Bribers
          • For veRBN Holders
      • Upgrades
    • How to lock RBN, boost and claim protocol revenues
  • Developers
    • Deployed Contracts
    • Ribbon Subgraph
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  1. RIBBON EARN
  2. Ribbon Earn stETH

Risk profile

The main risks associated with the vault are market risk, stETH/ETH price risk and the slashing risk:

  • Market risk: as each trade is 99.5% protected, if the option payout is 0, depositors can lose a fraction of their capital invested every week.

  • stETH/ETH price risk: as the payoff is based on the ETH price but is paid in stETH, the actual quantity of stETH earned is dependent on the exchange rate between ETH and stETH.

  • Slashing risk: ETH validators risk staking penalties, with up to 100% of staked funds at risk if validators fail. To minimise this risk, Lido stakes across multiple professional and reputable node operators with heterogeneous setups, with additional mitigation in the form of insurance that is paid from Lido fees.

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Last updated 2 years ago

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