Yield Performance
Historical yield data for ETH Strategy's underlying sources and projected protocol returns. Updated quarterly.
Why We Publish This
Most DeFi protocols show only a current APY — a single number that tells you nothing about consistency, volatility, or what to expect next quarter. We publish historical data because yield credibility comes from track records, not snapshots.
This page tracks the actual performance of ETH Strategy's underlying yield sources and, once the protocol is fully live, will include realized protocol returns updated quarterly.
ETH Strategy is currently in its initial phase. Treasury Lending launches Q2 2026 per the roadmap. Realized protocol yield data will be published starting Q3 2026. Until then, this page presents historical data for the underlying yield sources that power the protocol.
Underlying Yield Sources
ETH Strategy generates returns from three distinct sources. Each has a different risk/return profile and cyclicality.
Source 1: ETH Staking Yield (via esETH)
esETH wraps liquid staking tokens (stETH, cbETH, rETH, weETH). The underlying staking yield is harvested by the protocol and accrues to the treasury, increasing ETH per STRAT (EPS).
Quarterly Network Staking APR (2024–Q1 2026)
Q1 2024
3.5–4.0%
3.2–3.6%
3.1–3.4%
2.8–3.0%
Spiked to ~6% in March due to post-Dencun blockspace demand
Q2 2024
3.2–3.5%
2.9–3.2%
2.8–3.1%
2.6–2.8%
Post-Dencun normalization
Q3 2024
3.0–3.3%
2.7–3.0%
2.7–2.9%
2.4–2.6%
Gradual compression as staked ETH grew
Q4 2024
3.0–3.1%
2.7–2.8%
2.7–2.8%
2.4–2.5%
Nominal 3.08%, real (inflation-adjusted) 2.73% per Coin Metrics
Q1 2025
2.9–3.3%
2.6–3.0%
2.6–2.9%
2.3–2.6%
Staked ETH crossed 34M
Q2 2025
2.8–3.1%
2.5–2.8%
2.5–2.8%
2.3–2.5%
Staked ETH hit 35.3M ATH
Q3 2025
2.8–3.0%
2.5–2.7%
2.5–2.7%
2.3–2.4%
Continued compression
Q4 2025
2.8–3.0%
2.5–2.7%
2.5–2.7%
2.3–2.4%
Net staking flows turned negative
Q1 2026
2.75–3.3%
~2.7%
~2.9%
~1.9%
~35.9M ETH actively staked (28.9% of supply); validator entry queue ~3.4M ETH (~60 days)
Sources: Rated Network, Coin Metrics (Issue 288), Staking Rewards, DefiLlama. Network APR includes consensus + execution layer rewards (MEV/priority fees). Net APYs reflect protocol fees (Lido 10%, Coinbase 10%, Rocket Pool variable).
Key observations:
ETH staking yield has compressed from ~4% to ~2.7–3% over two years as the validator set grew from ~28M to ~35.9M staked ETH
Execution layer rewards (MEV + priority fees) contribute ~20% of total validator income and are the primary source of variance
The floor is set by consensus rewards (~2.8% at current validator count); the ceiling depends on network activity
Source 2: Treasury Lending Interest
Once Treasury Lending launches, borrowers pay fixed-rate interest denominated in esETH. This interest flows to the StakedStrat contract and is distributed to STRAT stakers via 7-day linear streaming.
Comparable DeFi Lending Rates (ETH Borrow APY)
Q1 2024
2.5–4.0%
2.8–4.2%
2.3–3.5%
2.6–3.8%
Q2 2024
2.0–3.0%
2.2–3.2%
1.8–2.8%
2.0–3.0%
Q3 2024
1.8–2.5%
2.0–2.8%
1.6–2.3%
1.8–2.5%
Q4 2024
1.8–2.5%
2.0–2.7%
1.7–2.3%
1.9–2.6%
Q1 2025
1.8–2.5%
2.0–2.8%
1.7–2.4%
1.9–2.6%
Q2 2025
2.0–3.5%
2.2–3.5%
1.8–3.0%
2.0–3.2%
Q3 2025
1.8–2.5%
2.0–2.8%
1.6–2.3%
1.8–2.6%
Q4 2025
1.5–2.3%
1.8–2.5%
1.5–2.2%
1.7–2.4%
Q1 2026
1.95%
2.27%
2.00%
2.32%
Sources: DeFiRate, Aavescan, DefiLlama Yields. Q1–Q4 2025 ranges estimated from available on-chain data and DeFi market reports; exact rates fluctuate continuously with utilization. Q1 2026 figures are point-in-time snapshots from DeFiRate (March 17, 2026).
Why Treasury Lending rates differ from DeFi lending rates: Treasury Lending is a fixed-rate, fixed-term product with no liquidation risk (positions are non-liquidatable). This structural difference means borrowers may accept higher rates for the certainty and safety, while the protocol captures the premium. The worked example uses a 10% annual rate to illustrate mechanics — actual rates will be set by governance based on market conditions.
Source 3: Implied Option Premium (Convertible Notes)
The protocol borrows ETH at zero interest through convertible notes. In traditional fixed income, equivalent borrowing costs 5–10% annually. The difference — what bond buyers "pay" in exchange for conversion rights — is the implied option premium. This is structural revenue, not a yield you can track quarterly like interest. It manifests as treasury growth without corresponding interest expense.
Comparable Convertible Bond Yields (TradFi)
MicroStrategy (0.625% 2028)
0.625%
42.5%
2024
MicroStrategy (0.875% 2031)
0.875%
35.0%
2024
MicroStrategy (0% 2027)
0.000%
50.0%
2021
Tesla (2% 2024)
2.000%
42.5%
2019
ETH Strategy's notes carry 0% coupon — matching the most aggressive MicroStrategy issuance. The "yield" to the protocol is the full cost of capital that would otherwise be paid as interest.
Projected Yield Stack (Illustrative)
The following table illustrates how ETH Strategy's multiple yield sources combine. These are projections based on historical data, not guarantees.
ETH staking yield (via esETH harvest)
2.5%
3.0%
4.0%
Treasury (EPS growth)
Treasury Lending interest
3.0%
5.0%
8.0%
StakedStrat (esETH rewards)
Implied option premium (annualized)
2.0%
5.0%
10.0%
Treasury (EPS growth)
Gross protocol yield on treasury
7.5%
13.0%
22.0%
These projections assume: (a) Treasury Lending utilization of 50–80%, (b) sustained bonding demand, and (c) ETH staking yields within historical ranges. Actual results will vary. The conservative case uses current depressed rates; the bull case reflects conditions like Q1 2024.
Important: These yields accrue differently depending on your role in the protocol:
STRAT stakers earn Treasury Lending interest as esETH rewards
All STRAT holders benefit from EPS growth driven by staking yield harvest and implied option premium
Bond holders (CDT + NFT option) earn 0% interest but hold conversion rights with embedded optionality value
ESPN depositors earn option premium income from a different strategy — see ESPN
For role-specific yield expectations, see the persona guides.
ETH Staking Market Context
Total ETH staked (active)
~35.9M ETH
Mar 2026
% of ETH supply staked
~28.9%
Mar 2026
Active validators
~1,100,000
Mar 2026
Staked ETH market value
~$77B
Mar 2026 (at ~$2,140/ETH)
Lido market share
~24.3% of staked ETH (~8.7M ETH)
Mar 2026
Lido TVL
~$18.6B
Mar 2026
Network-wide staking APR
~2.86% (consensus) / ~3.3% (total incl. MEV)
Mar 2026
Sources: Datawallet (35,859,802 ETH actively staked), StakingRewards, DefiLlama, beaconcha.in. Validator entry queue contains ~3.4M ETH pending activation (~60-day wait) while exit queue remains minimal (~15K ETH), indicating strong net inflows.
Yield Comparison: ETH Strategy vs Alternatives
Solo ETH staking
2.75–3.3%
None
High (run a node)
Low (32 ETH locked)
Liquid staking (stETH)
~2.7%
None
Low
Medium
Aave ETH lending
1.0–2.0%
None (supply side)
Low
Medium
Leveraged staking (Aave loop)
5–12%
Yes
High
High
ETH Strategy (STRAT staking)
7.5–13%+ projected
None
Medium
High
ETH Strategy targets the yield range of leveraged strategies without the liquidation risk. The yield comes from structural sources (zero-interest borrowing, fixed-rate lending, staking rewards) rather than leverage or token emissions.
Reporting Cadence
Once Treasury Lending is live, all reporting will move to a live dashboard which captures
Realized EPS growth — actual ETH per STRAT change over the quarter
Treasury Lending utilization — % of available treasury lent out
Interest revenue distributed — total esETH distributed to StakedStrat
Bonding volume — total ETH bonded and implied option premium captured
Staking yield harvested — esETH harvested from underlying LST yield
Failure Modes & Gotchas
These projections can be wrong. Here's how:
Staking yield compression. If the validator set grows to 40M+ ETH, consensus rewards drop below 2.5%. Execution layer rewards could partially offset this if network activity increases.
Low bonding demand. If nobody wants to purchase convertible notes, the implied option premium is zero. This is the largest variable — it depends on STRAT's perceived value and market conditions.
Low Treasury Lending utilization. If borrowers don't show up, lending interest revenue is minimal. The protocol has other revenue sources, but staker yield from lending would be low.
Correlation of sources. In a severe bear market, staking yields compress, bonding demand drops, and lending demand falls — all three sources weaken simultaneously. The protocol is designed to survive this (zero-interest debt, no liquidations), but yields would be low.
Smart contract risk. A vulnerability in any protocol contract could result in loss of funds, not just reduced yield. See Risks and Defense in Depth.
Last updated: March 2026. Next update: Q3 2026 (first realized performance data).
Last updated