USD - Risk Level 3

Investment Thesis

This Vault represents the composition of high-reward DeFi strategies with best risk-reward ratios. Wide range of protocols and assets allows to build well diversified portfolio. Among strategies you could find simple pool liquidity provision as well as delta-neutral and leveraged strategies.

The Vault is focused solely on stablecoins and protocols around them. These assets and protocols, i.e. building blocks, have increased risks which is translated into higher retuns. In this portfolio liquidity provider takes risk exposure to building blocks with BB+ rating (more in RAMP), Risk exposure table could be seen below.

Risks notice

You should notice that some stablecoins, such as MiM, eUSD, alUSD, XAI, can face depeg events for reasons including (but not limited to): insufficient liquidity in DEX pools, a significant level of centralization in protocols, providing direct or indirect access to the collateral of these stablecoins by the protocol team. This could potentially lead to a reduction in the investment value if you choose to withdraw from the vault, thereby locking in losses resulting from differences in stablecoin prices.

Certain DeFi strategies, like leveraging on Sonne Finance or utilizing the USDC pool on Across protocol, may encounter insufficient liquidity to meet withdrawal demands promptly. This could lead to a temporary inability to withdraw assets from these strategies. However, once free liquidity returns to the protocols, you will be able to withdraw your liquidity immediately.

In the analysis of protocols and assets, special emphasis is placed on the issue of centralization. In this Vault, no strategy involves an externally owned account (EOA) wallet with critical access to liquidity or permission to alter crucial configurations. The minimum requirement includes a multisig contract with identified signers, and as a best practice, a timelock contract is recommended.

Nominal

USDC

Risk Level

The risk level is set at value 3 because the Vault consists of relatively risky, not top-tier DeFi protocols and assets, which involve a significant level of centralization.

Eligible Assets

USDC and USDT

Portfolio of DeFi Strategies and Income Source

Strategy	Blockchain	Weight	Income source
[USD] Penpie Ethereum eUSD	Ethereum	2.5%	Trading fees Incentives: PENDLE, PNP
[USD] Equilibria Ethereum eUSD	Ethereum	2.5%	Trading fees Incentives: PENDLE, EQB, xEQB
[USD] Abracadabra Arbitrum MIM-2crv	Arbitrum	10%	Trading fees Incentives: ARB, SPELL
[USD] Sonne Base Leveraged USDC	Base	3%	Interest rates Incentives: SONNE
[USD] Sonne Base Leveraged USDbC	Base	3%	Interest rates Incentives: SONNE
[USD] Sonne Base Leveraged DAI	Base	3%	Interest rates Incentives: SONNE
[USD] Moonwell Base Leveraged USDC	Base	10%	Interest rates Incentives: WELL, USDC
[USD] Moonwell Base Leveraged DAI	Base	10%	Interest rates Incentives: WELL, USDC
[USD] Convex Curve crvUSD/USDT	Ethereum	10%	Trading fees Incentives: CRV, CVX
[USD] Across Ethereum USDC	Ethereum	10%	Trading fees Incentives: ACX
[USD] Convex Frax eUSD/FRAXBP	Ethereum	5%	Trading fees Incentives: FXS, CRV, CVX
[USD] Convex Frax XAI/FRAXBP	Ethereum	5%	Interest rates Trading fees Incentives: FXS, CRV, CVX
[USD] Convex Frax alUSD/FRAXBP	Ethereum	5%	Trading fees Incentives: FXS, CRV, CVX
[USD] Convex Prisma mkUSD/crvUSD	Ethereum	10%	Trading fees Incentives: PRISMA, CRV, CVX
[USD] Convex Prisma mkUSD/FRAXBP	Ethereum	5%	Trading fees Incentives: PRISMA, CRV, CVX
[USD] Convex Prisma mkUSD/USDC	Ethereum	5%	Trading fees Incentives: PRISMA

The return is mainly formed from trading fees, interest rates and reward tokens. As trading fees and interest rates are already autocompounded in the strategy logic, all the reward tokens will be reinvested. Periodically reward tokens are claimed and sold for the Vault notion and reinvested into the strategy.

Risk Exposure

Risk object	Type	Rating	Share

Vault Version Details

In the previous Vault version several strategies were downperforming which result in unadequate risk-reward ratio. They were replaced with fresh and high-yield leveraged positions on Sonne Finance on Base and on Moonwell Finance on Base

Strategy	Type	Reason
[USD] DODO Ethereum USDC	Out	Decreased performance
[USD] Velodrome Optimism sUSD/USDC	Out	Decreased performance
[USD] Velodrome Optimism MAI/USDC	Out	Emergency exit due to MAI depeg
[USD] Sonne Base USDC	In	High incentivisation
[USD] Sonne Base USDbC	In	High incentivisation
[USD] Moonwell Base DAI	In	Reward token appreciation due to new tokenomics design