Lend $vbETH on Teller to Earn 25% Compounding Yield

Teller Protocol

Sep 15, 2025 • 3 min read

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Are you holding $vbETH on Katana?

You can now lend directly on Teller and earn 25% APY. There’s no impermanent loss, no LST exposure, no pairing, and no lockups.

Just your $vbETH, earning more $vbETH without giving up control of your position.

How Does Teller Work?

Teller provides single sided, compounding yield.

No LST exposure and no impermanent loss.

The yield comes from the borrowers repaying their loans.

The process is transparent and onchain. The terms are set per pool. And once you lend, you earn yield automatically whenever a loan is repaid. To bootstrap liquidity, reward emissions are currently 25% on $vbETH. As borrowing activity increases, so does the yield.

Teller was built for Katana token holders who want to stay positioned and still generate returns.

What is $vbETH?

The $vbETH Katana vault bridge is a DeFi mechanism that allows users to deposit Ether (ETH) into a vault and receive a yield-generating wrapped token called $vbETH.

Here is a step-by-step breakdown of how it works:

Vault Bridge Protocol: The system is built on the Vault Bridge Protocol, which is a revenue-generating mechanism for EVM-compatible chains. It allows Layer 2 networks to earn yield from their bridged total value locked.
Asset Deposit: A user deposits ETH into the Katana Vault Bridge.
Wrapped Token: The deposited assets are held in a vault, and the user receives a vault bridge IOU token, in this case, $vbETH, as a 1:1 representation of their deposit.
Yield Generation: The underlying ETH is automatically deposited into yield-generating strategies, which are managed by protocols like Morpho and SushiSwap. This allows the deposited assets to earn passive income.
Revenue Distribution: The revenue generated from these strategies is streamed back to the Katana chain. The chain's governance determines how this yield is distributed.
Token Utility: The $vbETH token remains fully composable, meaning it can be used within the broader DeFi ecosystem while continuing to generate yield.

This system offers several benefits, including providing a native revenue stream for the Katana ecosystem that scales with TVL, using battle-tested infrastructure from protocols like Morpho and Sushi by employing professionally managed risk strategies.