Manager Lending
Managers lock up their depositor's brktETH to generate additional yield.
Users deposit brktETH into Strategy Vaults so managers can attempt to generate ETH+ returns. The manager wants to maintain ETH exposure at all times. Therefore, managers lock up their brktETH as collateral and can either utilize the LSTs directly or borrow against them to remain long ETH exposure. Locking up brktETH (or underlying collateral) is already giving them ETH exposure plus the block rewards for brktETH.
The manager is charged an interest rate for the loan, so their job is to generate a return that exceeds the interest rate they are required to pay.
Lending Facilities
Bracket has approved two primary lending facilities for managers, AAVE and Morpho Blue. These facilities should have sufficient depth to borrow against LST collateral. Managers must monitor and manage their positions in order to avoid liquidation as well as generate a positive return. Both protocols are whitelisted by default.
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