Summary
Reallocate funds from the Morpho Aave V2 USDT strategy to the Gauntlet USDT vault on Morpho Vaults, which offers a higher yield. Additionally, set the Gauntlet USDT vault as the default strategy and remove the Morpho Aave V2 USDT Optimizer as a strategy.
Background
We previously kept funds in the Morpho Aave USDT strategy because it was the best performing strategy by far. However, things have changed since then and it is now underperforming considering the 14-day APY has fallen to 1.62% while also not earning any MORPHO tokens.
We have moved over the USDC from the Morpho Aave V2 optimizers into Morpho vaults not too long ago due to the fact that they have slowly been deprecated and MORPHO incentives being shifted into Morpho Vaults to encourage capital to migrate to the new platform.
Currently, 1,778,220.44 USDT remains in the Morpho Aave V2 optimizer, dragging down OUSD’s overall APY. Given our strong relationship with Gauntlet and their vaults’ strong performance, shifting these funds to the Gauntlet USDT vault aligns with our strategy.
Recommendation
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Move 1,778,220.44 USDT from the Morpho Aave V2 Optimizer to the Gauntlet USDT vault, which offers a 5.99% APY (including MORPHO rewards), significantly improving returns.
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Set the Gauntlet USDT vault as the default strategy for USDT, leveraging Gauntlet’s strong risk management and sustainable yield generation.
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Remove the Morpho Aave V2 Optimizer as a strategy considering we can’t deposit funds into the optimizer again after the funds are withdrawn.
Conclusion
Migrating funds to the Gauntlet USDT vault optimizes yield and aligns with our ongoing strategy to maximize returns while maintaining good risk management and a strong partnership with Gauntlet. This move ensures that OUSD collateral earns competitive yields while benefiting from MORPHO incentives.
This proposal was authored by DegenSensei *