Just a short while ago, Redacted launched a partnership with our friends at Arrakis. In this guide I’ll show you how to use Arrakis and of course, how to earn some yield on your pxETH.
Please note: This guide is not a recommendation and interacting with DeFi protocols can be risky. Please do your own research and use your best judgment. Best of luck out there!
Overviews
Before we start, let's go over all the details to make sure you're fully prepared.
What is pxETH?
pxETH is one of two tokens associated with Pirex ETH – the liquid staking solution for ETH that will power the Dinero protocol. Users receive pxETH when they deposit ETH into Pirex ETH. It’s liquid, fungible, and pegged 1:1 to ETH. Functionally, you can think of it as wrapped ETH (WETH).
It’s worth noting that the ETH underlying pxETH is staked in Dinero validators, but pxETH does not earn ETH staking yield. Check out this guide for more information on Pirex ETH’s two-token design and how to earn staking yield.
What is Arrakis Finance?
Arrakis is a protocol that deploys algorithmic strategies for liquidity providers (LPs) on top of Uniswap V3. With Arrakis Vaults, LPs can manage their assets automatically, maximizing their efficiency – which is notoriously difficult to do manually on Uniswap V3.
Obtaining pxETH
Before getting started, you’ll need to get your hands on pxETH. You can mint some with ETH you already own or you can buy it through DEXes like PancakeSwap, Curve, or Balancer.
If you’re looking to mint pxETH, navigate to the mint page here. The mint screen will provide you with two options:
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Mint pxETH with ETH
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Deposit to apxETH vault with ETH
If you want to earn ETH staking yields, stop reading this guide and deposit to the apxETH staking vault. But for this partnership we will be using pxETH.
Remember: pxETH does not earn staking yields. Instead, you’ll earn yield on pxETH from opportunities like the ones outlined in this guide.
Earning on Arrakis
To earn yield on Arrakis, we’ll be providing liquidity to the pxETH / WETH vault on Ethereum mainnet. At time of writing, Redacted is incentivizing this pool with BTRFLY rewards – the APR can be seen on the Arrakis UI. Arrakis is also pre-token… so who knows if extra rewards await LPs down the line 👀
Proving Liquidty on Arrakis (pxETH/WETH)
After minting pxETH, go here to the Arrakis dapp. That link should bring you to the pxETH/WETH vault automatically, if it doesn’t, just do the following:
Underneath the V2 Vaults, type “pxETH” in the search bar and you’ll see the pxETH/WETH vault appear:
Before depositing you’ll also need some WETH. You can get some by swapping any asset for WETH or by wrapping your ETH using any DEX.
To deposit to the vault:
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Connect your wallet if you haven’t already.
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Enter the amount of WETH/pxETH you’d like to deposit to the liquidity pool and select your price range. I selected 0.1% to keep my assets range – this is important for ensuring your liquidity is actually used by traders.
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Click “Submit Liquidity”, then sign any transactions required.
And you’re done! It’s that easy.
Note: Similar to other DEXs Arrakis offers ranges for when the assets are traded and indicating at which range they will be earning fees. Keep in mind this is an LST, being close to the peg is vital. However, please do your own research when selecting your range.
Rewards on Arrakis
As your liquidity sits in the vault, you’ll begin earning BTRFLY rewards. These rewards can be claimed directly in the UI where we just deposited liquidity. If you’re looking for even more yield, lock those flappers as rlBTRFLY and you’ll start to earn more BTRFLY and ETH rewards for doing so.