Onboard Avantgarde USDC Core Morpho Vault as OUSD Strategy

[theOriginalPete]

Summary

Onboard the Avantgarde USDC Core Morpho Vault as an OUSD strategy to increase OUSD yield and increase exposure diversity.

Background

Avantgarde is a digital asset manager that has recently become a Morpho vault curator. They are currently going through their due diligence process to onboard wOUSD as a collateral to borrow USDC. They’re also exploring utilizing the ARM, and are considering superOETH as an option to generate yield for FunDefi.

As a sign of our willingness to work with Avantgarde and strengthen our relationship for the longterm I am recommending we onboard the Avantgarde USDC Core Morpho Vault as an OUSD strategy. Onboarding this vault will also increase the OUSD USDC yield and will diversify the tokens that OUSD currently has exposure to from the other Morpho vaults.

At time of writing the APY of the Avantgarde USDC Core Morpho Vault is 9.21% APY + MORPHO emissions + 2.5x Yield.fi points, minus a 0.92% performance fees = 9.37% net APY

The Avantgarde USDC Core Morpho Vault currently has exposure to:

Compared to the Steakhouse USDC Vault (5.33% APY):

And the Gauntlet USDC Prime Vault (5.33% APY):

Recommendation

• I am recommending we add this Avantgarde vault as a Morpho strategy, but that we initially cap the possible allocation of USDC to 25-50% of the possible USDC that could be allocated to Morpho. I believe this cap will prevent too much exposure to the smaller cap collateral tokens this vault is using for collateral

• I am leaving the initial USDC allocation amount to this vault up to the Guardians to make the call on

[Eli_Dubizh]

I support onboarding the Avantgarde USDC Core Morpho Vault, as it should boost OUSD yield and diversify our Morpho strategy exposure.

One note of caution: as OUSD is deposited into Avantgarde’s Morpho vaults to earn yield, and wOUSD is used as collateral to borrow USDC, any issue with the vault could reduce the value of the assets backing OUSD and simultaneously lower the value of wOUSD used as collateral. This creates a feedback loop where problems in one area could impact both OUSD’s backing and the loans secured by wOUSD.

While this isn’t a reason to oppose the proposal, it’s a risk worth monitoring as we expand these integrations.

[theOriginalPete]

Thanks for the support Eli! It would actually be USDC that would be deposited into the vault to earn the yield not OUSD, but users of the vault should still do their own research and due diligence with Avantgarde as the curator before choosing to use the vault