# Welcome to VaultBook

Last updated: April 3, 2026

Find detailed information on 80+ Gauntlet-curated vaults across Aera, Morpho, and Kamino. Explore strategy details, curation methodologies, incentive and fee structures, and more.

## Explore Gauntlet Vaults

<table data-view="cards" data-full-width="false"><thead><tr><th></th><th></th><th data-hidden data-card-cover data-type="image">Cover image</th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td><strong>Vault Metrics and Data</strong></td><td>Risk-adjusted DeFi yields for capital at scale.</td><td><a href="/files/GYsmNOSPN2ewkIIyG7Hi">/files/GYsmNOSPN2ewkIIyG7Hi</a></td><td><a href="https://app.gauntlet.xyz/?utm_medium=organic&#x26;utm_source=vaultbook">https://app.gauntlet.xyz/?utm_medium=organic&#x26;utm_source=vaultbook</a></td></tr><tr><td><strong>$80M+ TVL</strong></td><td>Rebalancing across the best USDC yields in DeFi.</td><td><a href="/files/jOLlLAB3AiOjhRu5GPTu">/files/jOLlLAB3AiOjhRu5GPTu</a></td><td><a href="/pages/zJwsTgBOu3PiFR3j53pf">/pages/zJwsTgBOu3PiFR3j53pf</a></td></tr><tr><td><strong>$1.2B+ TVL</strong></td><td>Curated vault strategies: BTC, ETH, and stablecoins.</td><td><a href="/files/4NZaj6CL79ivIcTiypTg">/files/4NZaj6CL79ivIcTiypTg</a></td><td><a href="/pages/7mQWnyISrjoYRrS9WbN7">/pages/7mQWnyISrjoYRrS9WbN7</a></td></tr><tr><td><strong>$30M+ TVL</strong></td><td>USDC, SOL, and CASH lending vaults on Solana.</td><td><a href="/files/unjaqs3X6cWrP1BNFlOJ">/files/unjaqs3X6cWrP1BNFlOJ</a></td><td><a href="/pages/zgvBBrMByl2jpvjGqwc2">/pages/zgvBBrMByl2jpvjGqwc2</a></td></tr><tr><td><strong>Bridge TradFi and DeFi</strong></td><td>Enhanced TradFi yields on DeFi rails.</td><td><a href="/files/VtV3wYtKgOFXbzCIdiFe">/files/VtV3wYtKgOFXbzCIdiFe</a></td><td><a href="/pages/gIyk5FdVpfAYE2dgT52U">/pages/gIyk5FdVpfAYE2dgT52U</a></td></tr></tbody></table>

***

## Work With Us

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We partner with leading institutions worldwide to integrate Gauntlet vaults, delivering institutional-grade yields directly to their users.

<a href="https://form.typeform.com/to/Dg1csGfV?utm_source=vaultbook&#x26;utm_medium=homepage&#x26;utm_campaign=sql" class="button primary" data-icon="circle-right">Get in Touch</a>
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<figure><picture><source srcset="/files/YaCJ8j99qr1RhMFW24av" media="(prefers-color-scheme: dark)"><img src="/files/UuL0wN8fl7gsZB2H3oJe" alt=""></picture><figcaption></figcaption></figure>
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***

## About Gauntlet

Gauntlet is the leading model provider in crypto, building optimization strategies for tokens, protocols, and chains. Leveraging our knowledge base and an expansive track record, we have become the premier curator in DeFi, monitoring and managing risk across custom vault strategies.

Our work equips investors, builders, and token issuers with data-driven strategies to confidently allocate funds onchain by leveraging the most trusted crypto-economic research and analysis. With eight years in the space, we’ve built models safeguarding tens of billions in digital assets across the crypto ecosystem, driving capital efficiency and mitigating risk.

Our core strengths lie in our sophisticated approach to financial modeling, risk management, and research. Our team excels in advanced risk modeling and parameter optimization, delivering risk-optimized performance for our partners. We elevate their strategies and implementations through rigorous stress testing and scenario analysis, coupled with detailed economic security assessments.

Visit [www.gauntlet.xyz](https://www.gauntlet.xyz/) to learn more.


# DeFi 101: Vaults & Curators

Explore the foundational concepts of vaults and curators.

{% hint style="success" %}
**The Basics**

**Vaults:** Users can supply assets into a vault and get a variable APY on their crypto assets.

**Curators:** Vault strategies are designed and maintained by curators, who oversee multiple facets of the process. Their primary aim is to manage risk and optimize yield.

**Infrastructure:** Vaults exist on a protocol, like Kamino, Morpho, or Aera, and are deployed on a blockchain.
{% endhint %}

DeFi presents institutional and individual participants alike with a complex landscape: dozens of protocols across multiple blockchains, diverse asset types, and numerous yield generation strategies. Navigating this ecosystem while maintaining proper risk management, conducting ongoing due diligence, and tracking performance across fragmented allocations creates significant operational overhead.

DeFi vaults solve this complexity by providing a standardized infrastructure layer for yield optimization. Explore our introductory materials.

<table data-card-size="large" data-view="cards"><thead><tr><th></th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td>Vaults 101</td><td><a href="/pages/cmkLzagiGg9sDaF7dHDz">/pages/cmkLzagiGg9sDaF7dHDz</a></td></tr><tr><td>Curators 101</td><td><a href="/pages/NIJEPB9GqZHTylXDuGg9">/pages/NIJEPB9GqZHTylXDuGg9</a></td></tr></tbody></table>

<figure><img src="/files/Ue6H78IDK6ipIyb5kLmK" alt=""><figcaption></figcaption></figure>


# Vaults 101

{% hint style="success" %}
**A vault is:**

1. A non-custodial smart contract
2. Transparent and verifiable
3. Defined by parameters that govern allowable actions by vault curators
   {% endhint %}

### Why Vaults?

#### **Operational Simplification**

Users can access diversified yield strategies without managing individual allocations across multiple protocols, chains, and markets. Vaults consolidate the complexity of position management, risk monitoring, and performance tracking, enabling a dedicated curator to oversee the multiple aspects of a vault.

#### **Non-Custodial Architecture**

Vault participants retain custody of their assets throughout their interaction with a vault. Users can verify a vault's holdings, curator actions, and withdraw assets at any time.

#### **Strategic Versatility**

Vaults serve as flexible infrastructure enabling multiple institutional use cases:

* Supporting institutional stablecoin growth and utility
* Powering fintech and banking earn programs
* Creating productive use cases for tokenized real-world assets
* Enabling payments companies to optimize treasury holdings

As banks, fintechs, and payment providers expand their onchain operations, vaults provide a critical integration layer between traditional financial services and DeFi protocols.

### Core Vault Features

A DeFi vault is fundamentally composed of three elements:

1. **Non-Custodial Smart Contract**: Code deployed onchain that holds user assets and executes defined strategies.
2. **Transparent Operations**: All transactions, holdings, and allocations are publicly verifiable onchain.
3. **Defined Parameters**: Predefined rules that constrain allowable actions by vault curators.

### **Common Vault Strategies**

<table><thead><tr><th width="233.17578125">Strategy</th><th>Example</th></tr></thead><tbody><tr><td><strong>Lending</strong></td><td>Allocate supplied assets to decentralized lending markets, optimizing for risk-adjusted returns. For example, USDC, ETH, or BTC lending vaults on <a href="/pages/7mQWnyISrjoYRrS9WbN7">Morpho</a> and <a href="/pages/zgvBBrMByl2jpvjGqwc2">Kamino</a>.</td></tr><tr><td><strong>Multi-chain</strong></td><td>Deploy capital across multiple chains and protocols simultaneously, dynamically rebalancing based on market conditions and risk parameters. For example, <a href="/pages/zJwsTgBOu3PiFR3j53pf">Gauntlet USD Alpha on Aera</a> may allocate supply to a blend of Gauntlet USDC Core on Mainnet and Gauntlet USDC Prime on Base.</td></tr></tbody></table>

### Transparency and Verifiability

Every vault action is recorded immutably onchain:

* **Performance**: Historical return data verifiable against onchain transactions
* **Allocations**: Current deployment across protocols and strategies
* **Fee Structure**: Transparent management and performance fee parameters


# Curators 101

{% hint style="success" %}
**A vault curator is the entity that designs, configures, and oversees a vault.**
{% endhint %}

A crucial difference between DeFi strategies and traditional off-chain strategies is that DeFi vault curators never take custody of user assets. DeFi’s non-custodial nature enables users to retain control of their funds at all times, and its programmatic nature encodes in every smart contract the actions that curators can and cannot perform with user assets.

### **Actions curators can take**

On a particular vault, curators handle the strategic and risk management decisions that impact vault performance. Our mandate is straightforward but crucial: protect suppliers first, then maximize safe, scalable yield.

**Market allocation and risk parameters (lending example)**

* **Market allocation:** In a lending vault, curators select which borrow markets to include in a vault and allocate user supply between them based on a set strategy.
* **Market supply caps:** Set supply caps on each market allocated to the vault to balance risk and yield. These caps set limits on how much vault supply can be allocated to a particular market.
* **New market LLTVs:** Configure [LLTV (Liquidation Loan-to-Value)](/vaults/morpho-vaults/vault-curation-considerations-a-deeper-dive/liquidations-and-liquidators) ratios based on asset volatility, DEX liquidity depth, and oracle nuances. When spinning up a new market, we set LLTVs to ensure that any loan positions taken out against vault supply are sufficiently over-collateralized.

<figure><img src="/files/PRuxdWZwZrrvBIxKKoQk" alt=""><figcaption><p>Market allocation breakdown for <a href="https://app.gauntlet.xyz/vaults/arb:0x7e97fa6893871a2751b5fe961978dccb2c201e65">Gauntlet USDC Core on Morpho's Arbitrum deployment</a>.</p></figcaption></figure>

**Active risk management**

* Raise or lower vault caps based on market signals: improved DEX depth, sustained borrow demand from diverse borrowers, and proven liquidation performance in stress events.
* Rebalance allocations to optimize risk-adjusted yield as market conditions change.

{% hint style="info" %}
[Explore the details of our curation methodology and risk management approach](/vaults/morpho-vaults/curation-methodology-and-risk-factor-overview).
{% endhint %}

### **Actions curators cannot take**

The limitations placed on curators are just as important as the actions we can take.

* **Curators cannot execute supply or withdrawal transactions that move funds on- or off-platform**: At no point in the curation lifecycle do curators have the authority to withdraw user funds. This means that wherever vault supply is allocated, a supplier can withdraw funds (subject to available liquidity).
* **Curators cannot block users from withdrawing funds:** the ability for a user to unilaterally withdraw funds from a vault is encoded in the vault smart contract. *Note:* During market utilization spikes (which may occur as a result of adverse market conditions), withdrawals may be delayed.

{% hint style="info" %}
[Read more on how our vaults fared during a recent period of market turmoil and liquidity stress](https://www.gauntlet.xyz/resources/market-report-liquidity-stress-period-nov-2025).
{% endhint %}

### **Why expertise matters: The case for professional curation**

Effective vault curation requires specialized knowledge across multiple domains:

**Risk modeling and market analysis**

Curators must have an understanding of how to balance risk with capital efficiency. For example, markets with higher LLTVs naturally attract more borrowers since borrowers get access to higher leverage. However, higher LLTVs give less room for error during adverse market conditions. The role of a curator is to find the appropriate balance that drives risk-adjusted yield.

**Collateral analysis and due diligence**

Our vaults adhere to rigorous risk management guidelines to enhance resilience against market volatility. This begins with an extensive [due diligence evaluation](/vaults/morpho-vaults/curation-methodology-and-risk-factor-overview/due-diligence) of collateral assets. Our curation team engages in this comprehensive analysis before adding any new market to a Gauntlet Vault. The process includes an assessment of [liquidity, security, audits, oracles, special mechanisms, and more](/vaults/morpho-vaults/curation-methodology-and-risk-factor-overview).

**Liquidation mechanics and DEX liquidity**

Liquidations on assets with thin DEX liquidity can trigger liquidation cascades. Deep liquidity helps facilitate liquidations as they're needed.

**Real-time risk management**

Our risk infrastructure uses simulations, real-time monitoring, and automated response systems to continuously assess market conditions. This helps us determine when to keep assets idle, when to deploy to new markets, and when to pull back.


# Gauntlet USD Alpha Vault

<a href="https://app.gauntlet.xyz/vaults/gtusda?utm_source=website&#x26;utm_medium=vaultbook&#x26;utm_campaign=page1" class="button primary" data-icon="circle-right">Explore the Vault</a>

**Gauntlet USD Alpha (gtUSDa)** seeks to achieve the highest risk-adjusted yield on stablecoins. Leveraging our battle-tested optimization engine to allocate to lending markets across chains, the strategy can serve crypto-native and traditional financial institutions alike for various use cases.

**The vault** is built on the Aera Protocol, a decentralized blockchain protocol that allows users to autonomously manage digital assets in a non-custodial fashion. Access full performance metrics on the Gauntlet App, including historical yield, market allocations, and collateral at risk.

**Gauntlet USD Alpha** is not a points-farming, highly incentivized vault like what might exist elsewhere. We’ve been in this game long enough to know that sustainability matters. Real yield matters. As we refine the strategy, Gauntlet USD Alpha will combine variable-rate and fixed-rate yield opportunities across chains.

**Strategy:** [**Gauntlet USD Alpha**](https://app.gauntlet.xyz/vaults/gtusda?utm_source=vaultbook\&utm_medium=organic)

**Ticker:** gtUSDa

**Supply asset:** $USDC on Base, Arbitrum, Optimism, and Ethereum Mainnet.

<figure><img src="/files/qTEhVt5OsNwEZiR4KlPb" alt=""><figcaption></figcaption></figure>


# How to Supply

<a href="https://app.gauntlet.xyz/vaults/gtusda?utm_source=website&#x26;utm_medium=vaultbook&#x26;utm_campaign=page1" class="button primary" data-icon="circle-right">Explore the Vault</a>

### **Supply**

Capital allocators supply USDC into the vault via the [Gauntlet App](https://app.gauntlet.xyz/vaults/gtusda) on Base, Arbitrum, Optimism, and Ethereum Mainnet.

{% embed url="<https://www.youtube.com/watch?v=39Ia7UQgiMc>" %}

### **Receive gtUSDa**

Suppliers receive gtUSDa, an ERC-20 token that is a claim on the supply amount plus earnings. Supply is reflected onchain within 6-12 hours.

### **Yield Optimization**

Our automated optimization engine, combined with our risk management platform, selects various cross-chain opportunities for the vault to execute. This includes Morpho vaults on Base, Ethereum Mainnet, Arbitrum, and Optimism. The strategy optimizes for available yields within the opportunity set, considers TVL levels, assesses impacts from the size of a given allocation, and generates sustainable real yield.

### **Incentives**

Morpho Rewards/incentives are regularly converted to USDC and redeployed to the strategy. Gauntlet USDC Rewards are regularly streamed by Sablier.

### **Withdrawal**

USDC withdrawal requests can be initiated at any time for gtUSDa. Transactions complete within 6-12 hours on average.


# Strategy Use Cases and Benefits

<a href="https://app.gauntlet.xyz/vaults/gtusda?utm_source=website&#x26;utm_medium=vaultbook&#x26;utm_campaign=page1" class="button primary" data-icon="circle-right">Explore the Vault</a>

### Use Cases

Gauntlet USD Alpha has a wide variety of applicable use cases for crypto-native and traditional financial institutions alike:

* **Asset Managers & Financial Institutions:** Financial institutions interested in offering custom yield strategies directly to their customers.
* **L1 & L2 Ecosystems:** Blockchains looking to bootstrap their DeFi ecosystem by offering native yield opportunities.
* **Wallet Providers & Exchanges:** Platforms with existing crypto-native user bases can integrate Aera vaults to offer their users seamless access to yield strategies directly within their familiar interface, enhancing user retention and engagement.
* **RWA (Real-World Asset) Issuers & Platforms:** Entities tokenizing real-world assets can partner with Aera to create yield-bearing products that combine RWAs with DeFi-native strategies. Check out our launch with Securitize and Apollo to see what’s possible.

Any organization wanting to offer innovative, onchain financial strategies without the overhead of building and managing complex portfolio and risk management infrastructure from scratch can be a strong partner.

### Strategy Benefits

Gauntlet USD Alpha was built by the most vigilant minds in DeFi curation, targeting consistent cross-chain stablecoin yields with automatic rebalancing.

* **Optimized** to pursue the highest, risk-adjusted, cross-chain yield on stablecoins.
* **Automatically rebalances**, including deploying rewards and incentives, minimizing gas and other costs associated with manually replicating the strategy.
* **Built by Gauntlet** and managed by our team — the most vigilant quants in crypto, already trusted with over $2 billion in vault TVL across several DeFi yield strategies. We have also managed risk for protocols with over $45 billion in DeFi TVL.
* **Designed on Aera’s vault infrastructure**, a protocol incubated by Gauntlet to allow for fast identification, integration, and allocation to new yield opportunities across protocols and EVM chains.
* [**Institutional-grade security posture**](https://www.gauntlet.xyz/vaults/security) and regulatory compliance.
* Access to **performance and risk metrics** via The Gauntlet App.


# Backtest and Benchmarking

Institutional capital allocators typically review a backtest: a quantitative evaluation of how a strategy would have performed in past market conditions. We’re excited to make this information available for Gauntlet USD Alpha.

### Backtest Including Pendle Markets

<figure><img src="/files/a2eW3kkbHhEHangjHLwP" alt=""><figcaption></figcaption></figure>

### First Backtest

The backtest evaluated the initial strategy: a mix of Morpho vaults across Mainnet and Base with reinvested rewards for one year (to September 1, 2024) and 30-day relative performance. The benchmark consists of the USD yield opportunities tracked by vaults.fyi.

* Vaults.fyi benchmark: 6.75% annualized APY since start, 4.48% t30d annualized
* gtUSDa: 11.02% annualized return since start, 7.76% t30d annualized

<figure><img src="/files/lBzbbCwC45122iyV6hRg" alt=""><figcaption></figcaption></figure>

<figure><img src="/files/ULmmeipw8J0ZfHuDn95I" alt=""><figcaption></figcaption></figure>


# Optimization & Risk Management Considerations

### How We Optimize for Performance

Our approach goes beyond simple yield chasing. The strategy seeks to optimize for available yields within the opportunity set while considering:

* TVL impact: How our allocation size affects the underlying strategy performance
* Market conditions: Dynamic adjustment based on anticipated market shifts
* Liquidity constraints: Position sizing tied to real-time DEX and vault liquidity
* Sustainable returns: Expected yield calculated over 30-day rolling periods to smooth out temporary spikes

Central to our curation approach [across our vaults](https://vaultbook.gauntlet.xyz/morpho-vaults/curation-methodology-and-risk-factor-overview) is ensuring each vault meets our robust risk guidelines, is attractive to the DeFi community, and remains resilient enough to handle inherent crypto market volatility. Our approach to risk on Gauntlet USD Alpha is no different. Below, we outline the strategy's main risks and how we mitigate them.

### Key Risk Considerations and Mitigation Strategies

#### Liquidity

Large moves in or out of the strategy may move rates or incur slippage on swaps and bridging. We address this by constraining positions and collateral caps to real-time DEX and vault liquidity, always monitoring to optimize for yield while protecting from longtail risk.

#### Stablecoin risk

Risk-on stablecoins have a higher chance of depegging. To mitigate this, we maintain a hard floor on the ratio of risk-on versus blue-chip stables, ensuring the portfolio remains anchored to the most liquid and stable assets.

#### Smart contract risk

Smart contract or oracle failures in Morpho or vault adapters represent systematic risks. The vaults we allocate to follow strict risk standards that we regularly update, and we monitor health in real time across all positions.

### Our Risk Constraints Framework

We impose systematic risk constraints to avoid undesirable positioning. Over time, these constraints will be refined and respond to market conditions:

* Vault position sizes are constrained by vault and DEX liquidity in the underlying token
* Aggregate exposure to vaults denominated in non-blue-chip stablecoins is limited to 40% of the Gauntlet USD Alpha strategy portfolio. Blue-chip stablecoins include USDC, USDT, and DAI.
* Collateral exposure across all vault positions is constrained by DEX liquidity of each collateral token
* Token turnover is constrained by spot DEX liquidity to minimize market impact


# Vault Opportunity Set for Rebalancing & Allocation

### Morpho Vaults

<table><thead><tr><th width="315.76953125">Vault</th><th width="193.953125">Chain</th></tr></thead><tbody><tr><td><a href="https://app.morpho.org/base/vault/0xeE8F4eC5672F09119b96Ab6fB59C27E1b7e44b61/gauntlet-usdc-prime">Gauntlet USDC Prime</a></td><td>Base</td></tr><tr><td><a href="https://app.morpho.org/base/vault/0xc0c5689e6f4D256E861F65465b691aeEcC0dEb12/gauntlet-usdc-core">Gauntlet USDC Balanced</a></td><td>Base</td></tr><tr><td><a href="https://app.morpho.org/ethereum/vault/0x8CB3649114051cA5119141a34C200D65dc0Faa73/gauntlet-usdt-prime">Gauntlet USDT Prime</a></td><td>Ethereum</td></tr><tr><td><a href="https://app.morpho.org/ethereum/vault/0xdd0f28e19C1780eb6396170735D45153D261490d/gauntlet-usdc-prime">Gauntlet USDC Prime</a></td><td>Ethereum</td></tr><tr><td><a href="https://app.morpho.org/ethereum/vault/0x8eB67A509616cd6A7c1B3c8C21D48FF57df3d458/gauntlet-usdc-core">Gauntlet USDC Balanced</a></td><td>Ethereum</td></tr><tr><td><a href="https://app.morpho.org/ethereum/vault/0xc080f56504e0278828A403269DB945F6c6D6E014/gauntlet-eusd-core">Gauntlet eUSD Balanced</a></td><td>Ethereum</td></tr><tr><td><a href="https://app.morpho.org/ethereum/vault/0x500331c9fF24D9d11aee6B07734Aa72343EA74a5/gauntlet-dai-core">Gauntlet DAI Balanced</a></td><td>Ethereum</td></tr><tr><td><a href="https://app.morpho.org/ethereum/vault/0xc582F04d8a82795aa2Ff9c8bb4c1c889fe7b754e/gauntlet-usdc-frontier">Gauntlet USDC Frontier</a></td><td>Ethereum</td></tr><tr><td><a href="https://app.morpho.org/ethereum/vault/0xA8875aaeBc4f830524e35d57F9772FfAcbdD6C45/midas-usdc">Gauntlet USDC RWA</a></td><td>Ethereum</td></tr><tr><td><a href="https://app.gauntlet.xyz/vaults/arb:0x7e97fa6893871a2751b5fe961978dccb2c201e65">Gauntlet USDC Balanced</a></td><td>Arbitrum</td></tr><tr><td><a href="https://app.gauntlet.xyz/vaults/arb:0x7c574174da4b2be3f705c6244b4bfa0815a8b3ed">Gauntlet USDC Prime</a></td><td>Arbitrum</td></tr><tr><td><a href="https://app.morpho.org/opmainnet/vault/0xC30ce6A5758786e0F640cC5f881Dd96e9a1C5C59/gauntlet-usdc-prime">Gauntlet USDC Prime</a></td><td>OP Mainnet</td></tr></tbody></table>


# How to integrate with Gauntlet USD Alpha

[gtUSDa](https://basescan.org/address/0x000000000001CdB57E58Fa75Fe420a0f4D6640D5) is the ERC20 for our flagship stablecoin vault on Base, Arbitrum, Optimism, and Ethereum Mainnet, which can be integrated into other DeFi applications. Here is a basic integration guide to incorporate gtUSDa into your protocol or app.

{% hint style="info" %}
**gtUSDa is a transferable ERC20 on Base, Arbitrum, Optimism, and Ethereum Mainnet.**
{% endhint %}

We also have a dedicated frontend for supplying into this vault at [app.gauntlet.xyz/vaults/gtusda](https://app.gauntlet.xyz/vaults/gtusda).

### Contract Addresses

**gtUSDa vault addresses**

* `0x000000000001CdB57E58Fa75Fe420a0f4D6640D5` (gtUSDa contract on Base)
* `0x3bd9248048df95Db4fBD748C6CD99C1bAa40bAD0` (gtUSDa contract on Ethereum)
* `0x000000001DC8bd45d7E7829fb1c969cbe4D0D1eC` (gtUSDa contract on Arbitrum)
* `0x000000001DC8bd45d7E7829fb1c969cbe4D0D1eC` (gtUSDa contract on Optimism)

**Token addresses**

* `0x833589fcd6edb6e08f4c7c32d4f71b54bda02913` (USDC contract on Base)
* `0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48` (USDC contract on Ethereum Mainnet)
* `0xaf88d065e77c8cC2239327C5EDb3A432268e5831` (USDC contract on Arbitrum)
* `0x0b2C639c533813f4Aa9D7837CAf62653d097Ff85` (USDC contract on Optimism)

**Provisioner addresses**

* `0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07` (provisioner contract on Base)
* `0x74C4A66CE4F4779B11E7c63D42e51EEef3A80D11` (provisioner contract on Ethereum)
* `0xDd4a42603E6d8E515C3468789375A98c376821b3` (provisioner contract on Arbitrum)
* `0xCC923371F0d3A9cA75d98E767Df9dE1cdf5799Ef` (provisioner contract on Optimism)

{% hint style="info" %}
Note: All examples below are executed on Base.
{% endhint %}

### Supplying via Contract Calls

Supplying into gtUSDa is a combination of 2 function calls: an `approve` call to spend the USDC, and a `requestDeposit` call.

1. call [`approve`](https://basescan.org/token/0x833589fcd6edb6e08f4c7c32d4f71b54bda02913#writeProxyContract#F1) on the USDC contract to allow the USDC amount to be spent by the [provisioner contract](https://basescan.org/address/0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07)
   1. Note that this is not the vault contract itself, as the request runs through the provisioner to issue vault units asynchronously via a solving mechanism (see [https://docs.aera.finance/entry-exit-with-provisioner](https://docs.aera.finance/entry-exit-with-provisioner "mention") for more details)
2. [`requestDeposit`](https://basescan.org/address/0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07#writeContract#F7) . `requestDeposit` is an asynchronous operation, the user will submit the USDC to the provisioner and after the request is solved gtUSDa units will be sent back to the users wallet directly. This will generally happen within 6 hours though can take up to as long as 3 days (or otherwise based on deadline). See [https://docs.aera.finance/entry-exit-with-provisioner](https://docs.aera.finance/entry-exit-with-provisioner "mention") for more details
   1. token: `0x833589fcd6edb6e08f4c7c32d4f71b54bda02913` (USDC contract on Base)
   2. tokensIn: USDC amount in (decimal adjusted value)
   3. minUnitsOut: This parameter needs to be based on the current price of gtUSDa. To calculate it refer to the [PriceAndFeeCalculator](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#code) contract, specifically the [`convertTokenToUnits`](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#readContract#F4) function call.
      1. `convertTokenToUnits(0x000000000001CdB57E58Fa75Fe420a0f4D6640D5, 0x833589fcd6edb6e08f4c7c32d4f71b54bda02913, tokensIn)` -> Returns the decimal adjusted gtUSDa units.
      2. Multiply the above value by 0.97 (some buffer in case there are price changes)
   4. solverTip: `0`
   5. deadline: `block.timestamp + 259200` (3 days in seconds)
   6. maxPriceAge: `3600` (1 hour in seconds)
   7. isFixedPrice: `False`

{% hint style="info" %}
`minUnitsOut` is technically not required for automatically priced orders if the vault price is trusted but is highly recommended for safety.\
\
Please do not include a `solverTip` as the solver will not solve these requests.\
\
Please do not include a large deadline as unfillable orders cannot be refunded ahead of the `deadline`.
{% endhint %}

#### Example Request to deposit 1000 USDC

Call [`approve`](https://basescan.org/token/0x833589fcd6edb6e08f4c7c32d4f71b54bda02913#writeProxyContract#F1) on the Base USDC contract to allow the provisioner to spend

```
approve(
    0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07, // Provisioner Contract Address 
    1000000000 // USDC amount decimal adjusted
)
```

call [`requestDeposit`](https://basescan.org/address/0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07#writeContract#F7) on the provisioner, parameterizing this call is important

```
requestDeposit(
    0x833589fcd6edb6e08f4c7c32d4f71b54bda02913, // USDC Contract on base
    1000000000, // USDC amount decimal adjusted
    0.97 * convertTokensToUnit(0x000000000001CdB57E58Fa75Fe420a0f4D6640D5, 0x833589fcd6edb6e08f4c7c32d4f71b54bda02913, 1000000000), // minUnitsOut see above for more details
    0, // solverTip
    block.timestamp + 259200, // deadline: Set to at least 3 days, this is 3 days in seconds
    3600, // maxPriceAge: Set to 1 hour, 1 hour in seconds
    False // isFixedPrice
)
```

### Withdrawing via contract calls

To withdraw you similarly need to do an `approve` call followed by `requestRedeem` on the [Provisioner Contract](https://basescan.org/address/0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07) with the correct parameters.

1. call [`approve`](https://basescan.org/address/0x000000000001CdB57E58Fa75Fe420a0f4D6640D5#writeContract#F2) on the gtUSDa contract to allow the gtUSDa amount to be spent by the [provisioner contract](https://basescan.org/address/0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07)
2. [`requestRedeem`](https://basescan.org/address/0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07#writeContract#F8) This is similarly an asynchronous call where the user provides vaultUnits back to the Provisioner contract and after the request is solved the user will receive USDC in their wallet
   1. token: `0x833589fcd6edb6e08f4c7c32d4f71b54bda02913` (USDC contract on base)
   2. unitsIn: The amount of vault units you wish to redeem, correctly decimal adjusted. If you want to calculate the `unitsIn` based on the USDC value for the user you can again use the [`convertTokenToUnits`](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#readContract#F4) function on the [PriceAndFeeCalculator](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#code) contract as per the deposit call.
   3. minTokensOut: This parameter needs to be based on the current price of gtUSDa. To calculate it refer to the [PriceAndFeeCalculator](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#code) contract, specifically the [`convertUnitsToToken`](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#readContract#F7) function.
      1. `convertUnitsToToken(0x000000000001CdB57E58Fa75Fe420a0f4D6640D5, 0x833589fcd6edb6e08f4c7c32d4f71b54bda02913, unitsIn)` -> Returns the Decimal adjusted USDC value of the VaultUnits
      2. Multiply the above value by 0.97 (some buffer in case there are price changes)
   4. solverTip: `0`
   5. deadline: `block.timestamp + 259200` (3 days in seconds)
   6. maxPriceAge: `3600` (1 hour in seconds)
   7. isFixedPrice: `False`

{% hint style="info" %}
`minTokensOut` is technically not required for automatically priced orders if the vault price is trusted but is highly recommended for safety.\
\
Please do not include a `solverTip` as the solver will not solve these requests.\
\
Please do not include a large deadline as unfillable orders cannot be refunded ahead of the `deadline`.
{% endhint %}

#### Example Request to withdraw 1000 USDC

call [`approve`](https://basescan.org/address/0x000000000001CdB57E58Fa75Fe420a0f4D6640D5#writeContract#F2) on the gtUSDa contract to allow the provisioner to spend

```
approve(
    0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07, // Provisioner Contract Address 
    convertTokensToUnit(0x000000000001CdB57E58Fa75Fe420a0f4D6640D5, 0x833589fcd6edb6e08f4c7c32d4f71b54bda02913, 1000000000) // gtusda amount decimal adjusted
)
```

call [`requestRedeem`](https://basescan.org/address/0x18CF8d963E1a727F9bbF3AEffa0Bd04FB4dBdA07#writeContract#F8) on the provisioner, parameterizing this call is important

```
requestRedeem(
    0x833589fcd6edb6e08f4c7c32d4f71b54bda02913, // token: USDC Contract on base
    convertTokensToUnit(0x000000000001CdB57E58Fa75Fe420a0f4D6640D5, 0x833589fcd6edb6e08f4c7c32d4f71b54bda02913, 1000000000), // unitsIn: 1000 USDC via the PriceAndFee calculator
    0.97 * convertUnitsToToken(0x000000000001CdB57E58Fa75Fe420a0f4D6640D5, 0x833589fcd6edb6e08f4c7c32d4f71b54bda02913, unitsIn), // minTokensOut: unitsIn is the previous line response
    0, // solverTip
    block.timestamp + 259200, // deadline: Set to at least 3 days, this is 3 days in seconds
    3600, // maxPriceAge: Set to 1 hour days, this is 1 hour in seconds
    False // isFixedPrice
)
```

### \[ADVANCED] Monitoring and refunding orders

**Tracking orders**

When an asynchronous order is placed, the user will have an active but unfilled order. To provide additional transparency to users, these orders can be monitored by tracking the following `DepositRequested` or `RedeemRequested` events:

```
/// @notice Emitted when a user creates a deposit request
/// @param user The address requesting the deposit
/// @param token The token being deposited
/// @param tokensIn The amount of tokens to deposit
/// @param minUnitsOut The minimum amount of units expected
/// @param solverTip The tip offered to the solver in deposit token terms
/// @param deadline Timestamp until which the request is valid
/// @param maxPriceAge Maximum age of price data that solver can use
/// @param isFixedPrice Whether the request is a fixed price request
/// @param depositRequestHash The hash of the deposit request
event DepositRequested(
    address indexed user,
    IERC20 indexed token,
    uint256 tokensIn,
    uint256 minUnitsOut,
    uint256 solverTip,
    uint256 deadline,
    uint256 maxPriceAge,
    bool isFixedPrice,
    bytes32 depositRequestHash
);

/// @notice Emitted when a user creates a redeem request
/// @param user The address requesting the redemption
/// @param token The token requested in return for units
/// @param minTokensOut The minimum amount of tokens the user expects to receive
/// @param unitsIn The amount of units being redeemed
/// @param solverTip The tip offered to the solver in redeem token terms
/// @param deadline The timestamp until which this request is valid
/// @param maxPriceAge Maximum age of price data that solver can use
/// @param isFixedPrice Whether the request is a fixed price request
/// @param redeemRequestHash The hash of the redeem request
event RedeemRequested(
    address indexed user,
    IERC20 indexed token,
    uint256 minTokensOut,
    uint256 unitsIn,
    uint256 solverTip,
    uint256 deadline,
    uint256 maxPriceAge,
    bool isFixedPrice,
    bytes32 redeemRequestHash
);
```

**Checking when orders are filled**

When a deposit or redeem is filled, one of the following events will be emitted in the Provisioner:

```
/// @notice Emitted when a deposit request is solved successfully
/// @param depositHash The unique identifier of the deposit request that was solved
event DepositSolved(bytes32 indexed depositHash);

/// @notice Emitted when a redeem request is solved successfully
/// @param redeemHash The unique identifier of the redeem request that was solved
event RedeemSolved(bytes32 indexed redeemHash);
```

**Refunding expired orders**

If the deadline passes but an order isn't solved (rare), the user has to claim back their USDC or gtUSDa tokens using the `refundRequest` function.

```
/// @notice Request parameters for deposits and redemptions
/// @dev
/// - For deposits:
///   - units: minimum units the user wants to receive (minUnitsOut)
///   - tokens: amount of tokens the user is providing (tokensIn)
/// - For redemptions:
///   - units: amount of units the user is redeeming (unitsIn)
///   - tokens: minimum tokens the user wants to receive (minTokensOut)
struct Request {
    /// @notice Request type(deposit/redeem + auto/fixed price)
    RequestType requestType;
    /// @notice User address making the request
    address user;
    /// @notice Amount of vault units
    uint256 units;
    /// @notice Amount of underlying tokens
    uint256 tokens;
    /// @notice Tip paid to solver, always in tokens
    uint256 solverTip;
    /// @notice Timestamp after which request expires
    uint256 deadline;
    /// @notice Maximum age of price data allowed
    uint256 maxPriceAge;
}

/// @notice Refund an expired deposit or redeem request
/// @param token The token involved in the request
/// @param request The request to refund
/// @dev Can only be called after request deadline has passed
function refundRequest(IERC20 token, Request calldata request) external;
```

### Getting the User's balance of gtUSDa

Simply call the [balanceOf](https://basescan.org/address/0x000000000001CdB57E58Fa75Fe420a0f4D6640D5#readContract#F5) function on [gtUSDa](https://basescan.org/address/0x000000000001CdB57E58Fa75Fe420a0f4D6640D5) with the user's address.

### Pricing gtUSDa units in USDC (and vice versa)

We provide simple price conversion utilities between gtUSDa and USDC via the [PriceAndFeeCalculator](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e) contract.

Specifically there are two functions of relevance

* [`convertTokensToUnits`](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#readContract#F4) -> Takes in USDC value and returns amount of vaultUnits at current price
  * vault: `0x000000000001CdB57E58Fa75Fe420a0f4D6640D5` (gtUSDa vault contract)
  * token: `0x833589fcd6edb6e08f4c7c32d4f71b54bda02913` (USDC contract on base)
  * tokenAmount: Decimal adjusted USDC value (USDC has [6 decimals](https://basescan.org/token/0x833589fcd6edb6e08f4c7c32d4f71b54bda02913#readProxyContract#F11))
* [`convertUnitsToTokens`](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#readContract#F7) -> Takes in vaultUnits and returns USDC value at current price
  * vault: `0x000000000001CdB57E58Fa75Fe420a0f4D6640D5` (gtUSDa vault contract)
  * token: `0x833589fcd6edb6e08f4c7c32d4f71b54bda02913` (USDC contract on base)
  * unitsAmount: Decimal adjusted gtUSDa value (gtUSDa has [18 decimals](https://basescan.org/address/0x000000000001CdB57E58Fa75Fe420a0f4D6640D5#readContract#F7))

### Fetching the APY of the vault

This one is a little trickier as of right now, but we aim to make this simpler in the future via an API. As of right now the best way to get the APY of the vault is to index the price of the vault units in USDC over a given time period and extrapolate this to a yearly APY number.

### Calculating the TVL of the vault

To get the total TVL of the vault use the [`convertUnitsToTokens`](https://basescan.org/address/0x69dD4D44eed6BbC33B8A0bdFe17897Ab9044372e#readContract#F7) function and use the [`totalSupply`](https://basescan.org/address/0x000000000001CdB57E58Fa75Fe420a0f4D6640D5#readContract#F21) of gtUSDa as an input.


# Morpho Vaults

Welcome to our Morpho VaultBook, where you can learn about our Morpho Vaults, our approach to curation, and the various risk considerations that inform our strategies.

We began curating vaults on Morpho in early 2024. We now curate 70+ vaults across Ethereum, Base, Arbitrum, OP Mainnet, Katana, and Unichain. Vaults are categorized into three distinct risk levels:

<table data-view="cards"><thead><tr><th></th><th data-hidden data-card-cover data-type="image">Cover image</th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td><strong>Gauntlet Prime Vaults</strong> offer risk-adjusted yield from very low insolvency risk strategies, with blue chip, highly liquid assets as collateral.</td><td><a href="/files/Xtmg07ZjaGo8F6qi6Yaf">/files/Xtmg07ZjaGo8F6qi6Yaf</a></td><td><a href="/pages/xGWoKG9TaZqezjgY9Dyb">/pages/xGWoKG9TaZqezjgY9Dyb</a></td></tr><tr><td><strong>Gauntlet Balanced Vaults</strong> offer higher yield, with low insolvency risk strategies with a blend of blue chip and small-cap assets as collateral.</td><td><a href="/files/f1dJaLMEo2jJwZcXO7DY">/files/f1dJaLMEo2jJwZcXO7DY</a></td><td><a href="/pages/c4QKOjC1GqskEx8yt1PJ">/pages/c4QKOjC1GqskEx8yt1PJ</a></td></tr><tr><td><strong>Gauntlet Frontier Vaults</strong> offer the highest yields, allocating to riskier markets that may lead to higher risks of insolvency.</td><td><a href="/files/w2AwIGg2ToeaDU8JZGq4">/files/w2AwIGg2ToeaDU8JZGq4</a></td><td><a href="/pages/LBfudW6RfYj0Y1zFqjpq">/pages/LBfudW6RfYj0Y1zFqjpq</a></td></tr></tbody></table>

**Gauntlet Partner Vaults** can also be deployed in partnership with DeFi protocols that wish to integrate Gauntlet Vaults into their product stack. These can be either Prime, Balanced, or Frontier.


# Morpho Vaults Overview

Morpho is a leading lending primitive in DeFi. It provides a trustless lending/borrowing layer (Morpho) combined with an abstracted non-custodial risk and yield vault management layer (Morpho Vaults).

Borrowers deposit collateral to borrow loan assets from Morpho Markets, and suppliers supply loan assets to Morpho Vaults. As Vault Curator, we allocate Vault supply to Morpho Markets, optimizing for risk-adjusted yield based on a Vault strategy. Once created, all Morpho Markets are immutable and cannot be edited, providing a stable and reliable infrastructure layer.

Morpho’s unique structure enables the launch of isolated lending markets, each specifying:

* One collateral asset
* One loan asset
* Liquidation Loan To Value (LLTV)
* Interest Rate Model (IRM)
* Oracle

<table data-card-size="large" data-view="cards"><thead><tr><th></th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td>Vault Curators</td><td><a href="/pages/vcg5nYKt5OytNPstfLIf">/pages/vcg5nYKt5OytNPstfLIf</a></td></tr><tr><td>Morpho Vault Structure</td><td><a href="/pages/Vr1DjHjHCrvEARKebmpc">/pages/Vr1DjHjHCrvEARKebmpc</a></td></tr></tbody></table>


# Vault Curators

As a vault Curator, we play a vital role in the Morpho ecosystem, acting as the primary intermediary between vault suppliers and Morpho Markets. We create markets, curate risk, optimize returns, and manage liquidity. Vault Curators can take the following actions within a particular vault:

* **Allocate user supply** between various Morpho markets
* **Manage supply caps** for different markets to manage risk and optimize yield
* **Set vault fees** to earn a proportion of the interest

In line with their non-custodial nature, all supply and withdrawal transactions can only be completed by the user.


# Morpho Vault Structure

<figure><img src="/files/hGUhtkLWtapE38SbJfhc" alt=""><figcaption></figcaption></figure>

### Supply Asset

The supply asset is the foundation for a vault. To access Gauntlet-curated vaults and the associated risk-adjusted yield, a supplier must add supply to the vault.

### Vault APY

Annual percentage yield, APY, is the main economic draw of Morpho vaults. It represents the annualized return suppliers receive as a percentage of the assets supplied to a vault. APY is determined by the markets to which a specific vault allocates its supply, as well as any incentives in those markets. APYs change dynamically based on several parameters, including market utilization and supply allocation.

### Allocated Markets

A vault’s supply APY results from the underlying lending markets to which it allocates.

### Suppliers

Suppliers are the primary users of Morpho Vaults. They supply a particular asset into a Vault, which generates risk-adjusted yield based on the vault curator’s market allocations. Selecting an appropriate set of markets to supply loan assets against can be a complex task, requiring a nuanced understanding of risk management, market dynamics, and yield optimization. Gauntlet vaults on Morpho simplify this process, with experienced vault curators like Gauntlet executing strategies on their behalf in a non-custodial manner.


# V2 Vaults

### Introduction

Morpho V2 Vaults are a new class of vault that features an updated architecture, enhancing access to yield, liquidity, and the user experience. Crucially, V2 Vaults introduce a universal adapter model and more granular role separation.

The range of updates opens the door to more sophisticated yield strategies, including fixed-rate and permissioned lending.

### Gauntlet’s V2 Vaults

| Vault Name                                                                                                                               | Chain    |
| ---------------------------------------------------------------------------------------------------------------------------------------- | -------- |
| [**Gauntlet USDC Frontier V2**](https://app.morpho.org/ethereum/vault/0x9a1D6bd5b8642C41F25e0958129B85f8E1176F3e/gauntlet-usdc-frontier) | Ethereum |
| [**Gauntlet WETH Balanced V2**](https://app.morpho.org/ethereum/vault/0x5f342382D5F77F0f99E8f26161E689df6c7Cded3/gauntlet-weth-balanced) | Ethereum |
| [**Gauntlet USDT Balanced V2**](https://app.morpho.org/ethereum/vault/0xE571B648569619566CF6ce1060C97B621CB635D3/gauntlet-usdt-balanced) | Ethereum |
| [**Gauntlet USDC Prime V2**](https://app.morpho.org/ethereum/vault/0x8c106EEDAd96553e64287A5A6839c3Cc78afA3D0/gauntlet-usdc-prime)       | Ethereum |
| [**Gauntlet WETH Prime V2**](https://app.morpho.org/ethereum/vault/0x43fCd85E8D9D003D515f886891B7C742AC9f92da/gauntlet-weth-prime)       | Ethereum |
| [**Gauntlet USDT Prime V2**](https://app.morpho.org/ethereum/vault/0xf3557AD5E984211ac8A0874A670344f2C3376471/gauntlet-usdt-prime)       | Ethereum |
| [**USDC Frontier V2**](https://app.morpho.org/base/vault/0x1deEfABEe758AAbdC29a542B24ca3b75aFD56765/usdc-frontier)                       | Base     |
| [**WETH Balanced V2**](https://app.morpho.org/base/vault/0xFeFeC33668E22677c4762d0853d56245a800ff08/weth-balanced)                       | Base     |
| [**USDC Prime V2**](https://app.morpho.org/base/vault/0x050cE30b927Da55177A4914EC73480238BAD56f0/usdc-prime)                             | Base     |
| [**USDC Prime V2**](https://app.morpho.org/arbitrum/vault/0x610D151aE40662AE148cdBaaE1Ea5904b6AFAE78/gauntlet-usdc-prime)                | Arbitrum |
| [**USDC Balanced V2**](https://app.morpho.org/arbitrum/vault/0x55a2B207b0074E13AdCb858950a81B7a04775E0F/gauntlet-usdc-balanced)          | Arbitrum |

### V1 vs. V2

By using adapters, curators can tap into broader liquidity sources, build meta-vaults, or streamline the user experience, while also benefiting from more granular risk-parameter tuning and support for fixed-rate lending. V2 also introduces more granular role separation and enhanced risk and compliance controls.

[Visit Morpho Docs for a complete breakdown of Morpho V2 updates](https://docs.morpho.org/learn/concepts/vault-v2/#key-feature-comparison-morpho-vaults-v1-vs-morpho-vaults-v2).

|                                  | Morpho V1                                                                                                                                                                                                                                                                                            | Morpho V2                                                                                                                                                                                                                                                                                                                                                                                            |
| -------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Allocations**                  | Allocate supply to Morpho V1 Markets                                                                                                                                                                                                                                                                 | <p>Allocate supply to:</p><ul><li>Morpho V1 and V2 Markets</li><li>Morpho V1 Vaults</li><li>Other yield sources</li></ul>                                                                                                                                                                                                                                                                            |
| **Risk management and curation** | Market-level risk parameterization                                                                                                                                                                                                                                                                   | <p>Multidimensional risk parameterization across:</p><ul><li>Asset type</li><li>Oracle source</li><li>Protocol</li><li>Market configuration</li></ul>                                                                                                                                                                                                                                                |
| **Vault roles**                  | <p><strong>Owner</strong>: inherits responsibilities from all other roles.<br><strong>Curator:</strong> risk manager and yield strategist.<br><strong>Allocator:</strong> oversees vault allocations to underlying markets and vaults.<br><strong>Guardian</strong>: can revoke pending actions.</p> | <p><strong>Owner:</strong> sets the curator and sentinels.<br><strong>Curator:</strong> risk manager and yield strategist. Configures vault adapters, supply caps, gates, timelocks, and fees.<br><strong>Allocator:</strong> oversees vault allocations to underlying markets and vaults.<br><strong>Sentinel:</strong> can revoke pending actions, deallocate funds, and decrease supply caps.</p> |
| **Onchain permissions**          | Non-permissioned.                                                                                                                                                                                                                                                                                    | Permissioned or non-permissioned, with the ability to set allowlists.                                                                                                                                                                                                                                                                                                                                |
| **Fees**                         | Performance fees.                                                                                                                                                                                                                                                                                    | Performance fees and management fees.                                                                                                                                                                                                                                                                                                                                                                |

### In This Section

The pages below cover each V2 area in more depth:

<table data-card-size="large" data-view="cards"><thead><tr><th></th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td><strong>Roles &#x26; Capabilities</strong>: how Owner, Curator, Allocator, and Sentinel responsibilities are separated, and how the new Sentinel role hardens vault safety.</td><td><a href="/pages/pcq1VDKsjSqAlW2KpbxC">/pages/pcq1VDKsjSqAlW2KpbxC</a></td></tr><tr><td><strong>Adapters</strong>: the universal adapter model that opens V2 vaults to a broader range of yield sources.</td><td><a href="/pages/Q7tOBRAzDkJNWUoqvg6j">/pages/Q7tOBRAzDkJNWUoqvg6j</a></td></tr><tr><td><strong>Risk Parameterization &#x26; Controls</strong>: multidimensional risk IDs, per-function timelocks, abdication, and onchain permission gates.</td><td><a href="/pages/jHnsNrCUNRSqMSOAcCFy">/pages/jHnsNrCUNRSqMSOAcCFy</a></td></tr></tbody></table>


# Roles & Capabilities

Morpho V2 refines the role structure introduced in V1, providing more precise separation of responsibilities and adding a safety-oriented new role: the Sentinel. The result mirrors how large organizations structure operational oversight, where different functions hold distinct, narrowly scoped permissions.

### The Four V2 Roles

**Owner**

The Owner sets the Curator and Sentinels, and otherwise sits at the top of the role hierarchy. The Owner does not handle day-to-day curation or risk management.

**Curator**

The Curator is the risk manager and yield strategist. The Curator configures vault adapters, supply caps, gates, timelocks, and fees. Most Curator actions are timelocked: they are submitted on-chain and can be executed only after the configured waiting period has elapsed.

**Allocator**

The Allocator oversees vault allocations to underlying markets and vaults, serving as the operational arm that moves capital in accordance with the strategy defined by the Curator.

**Sentinel**

The Sentinel is a safety-oriented role designed for reactive risk mitigation. It acts as a check on the Curator and can intervene in emergencies. Multiple addresses may hold the Sentinel role on a single vault.

### Suggested Key Setup

How each role is typically held depends on the vault's operational profile. The patterns below are starting points, not requirements.

**Owner**

A secure multisig (for example, 4-of-6) or an institutional-grade MPC wallet. A single externally-owned account is not recommended for production vaults, given the scope of Owner authority.

**Curator**

A multisig (for example, 2-of-4 or 3-of-5) or an MPC wallet. The Curator submits most changes through timelocks, which gives the Sentinel and depositors a window to react if a Curator key is ever compromised.

**Allocator**

A smart contract with automated allocation logic, a hot-key EOA operated by a bot, or a fast-response multisig. The Allocator only moves capital within already-approved adapters and caps, so its authority is structurally narrower than the Curator's.

**Sentinel**

A hot key for fast emergency response, a DAO governance contract, or a trusted third party. Multiple addresses can hold the Sentinel role in a single vault, enabling redundancy and faster response across time zones.

### Why the Sentinel Role Matters

The Sentinel is structurally designed so that its actions can only reduce risk or halt pending changes. It can be thought of as a subtractive versus an additive role, as it cannot enable new adapters or increase exposure.

A Sentinel can:

* Revoke any pending Curator-submitted action before its timelock expires
* Deallocate funds from any adapter back to the vault's idle pool
* Decrease absolute or relative caps for any Risk ID (instant, no timelock required)

A Sentinel cannot:

* Enable or disable adapters
* Increase caps
* Change fees
* Set gates
* Modify timelocks
* Add or remove allocators

This narrow capability set is what allows the Sentinel role to be delegated broadly, including to a hot key for fast emergency response, a governance contract, or a trusted third party. If a Sentinel address were ever compromised, the role's permission constraints limit possible actions to those listed above, reducing the downside relative to keys with broader authority.

### Curator Capabilities in Detail

The Curator's authority spans most of the vault's configurable surface. Capabilities are grouped below by the area of the vault they affect. Most are gated by a timelock; a smaller set can be executed instantly, all of them in the direction of reducing risk or extending safety windows.

**Protocol Management**

* **\[Timelocked]** Enable or disable yield sources via Adapters

**Risk Curation**

* **\[Timelocked]** Increase absolute or relative caps for any Risk ID
* **\[Instant]** Decrease absolute or relative caps for any Risk ID

**Yield & Fee Management**

* **\[Timelocked]** Set the maximum rate at which vault assets can grow
* **\[Timelocked]** Set the performance fee and management fee
* **\[Timelocked]** Set the performance fee recipient and management fee recipient

**Operational Management**

* **\[Timelocked]** Add or remove Allocators
* **\[Timelocked]** Set Gate contracts for onchain access controls (shares gate, receive-assets gate, send-assets gate)
* **\[Timelocked]** Set the penalty for force-deallocate

**Timelock Management**

* **\[Instant]** Increase the duration of any timelock
* **\[Timelocked, 3 weeks]** Decrease the duration of any timelock
* **\[Timelocked]** Irreversibly disable a timelocked action (abdicate)

Note the difference between "increase timelock" (instant) and "decrease timelock" (3-week timelock): the Curator can always immediately lengthen the safety window, but shortening it requires the longer waiting period.

### Role Capability Comparison

The Sentinel is an expansion of the V1 Guardian role, with the same veto power and a broader risk-off toolset.

| Action                               | V1 Guardian | V2 Sentinel |
| ------------------------------------ | ----------- | ----------- |
| Revoke pending Curator actions       | ✓           | ✓           |
| Deallocate funds to idle pool        |             | ✓           |
| Decrease caps (instant, no timelock) |             | ✓           |


# Adapters

Adapters are the architectural cornerstone of Morpho V2. They are smart contracts that translate between the vault and an external yield source, holding positions on behalf of the vault. The universal adapter model is what gives V2 vaults their flexibility and broader reach.

### What Adapters Enable

In V1, vaults could only allocate to Morpho V1 markets. In V2, an adapter can connect a vault to:

* Morpho V1 markets, preserving existing strategies
* Morpho Midnight: the upcoming fixed-rate, fixed-term primitive
* Other Morpho V1 vaults, enabling meta-vault structures
* External protocols across DeFi

This means curators can build strategies that draw from significantly broader liquidity sources, layer vaults inside vaults, or integrate with protocols outside Morpho entirely, all from a single vault contract that suppliers normally interact with.

### Adapter Lifecycle and Risk Controls

Adapters are enabled by the Curator and are subject to timelocks before going live. They can also be abdicated, meaning a Curator can permanently and irreversibly disable the ability to enable new adapters of a given type. This hardens the vault's risk surface for institutional suppliers.

For each enabled adapter, exposure is governed by the vault's risk parameter framework: absolute caps, relative caps, and Risk IDs. See "Risk Parameterization & Controls" for more on how Gauntlet uses these to manage vault exposure.


# Risk Parameterization & Controls

V2 expands the toolkit Gauntlet uses to manage vault risk well beyond V1's per-market parameters. The result is more precise exposure management, with stronger safety and operational controls needed for institutional and compliant deployments.

### Multidimensional Risk IDs

V1 risk parameters were applied at the market level, with one set of caps per market. V2 introduces Risk IDs: shared risk factors that can apply across multiple markets and adapters simultaneously.

A Risk ID can correspond to:

* A specific market (V1-style)
* A collateral asset (e.g., cap total wstETH exposure across every market that uses it)
* An oracle source (e.g., cap total exposure to a specific price feed across all markets that rely on it)
* A protocol (e.g., cap total exposure to a specific lending protocol via adapters)
* A specific market configuration (LLTV band, IRM, etc.)

This is a meaningful operational change. In V1, if five different markets used the same oracle, caps had to be set on each market individually and the vault's aggregate oracle exposure was a sum tracked off-chain. In V2, a single Risk ID can cap the total oracle exposure across every market that uses it, with limits enforced on-chain automatically.

Each Risk ID supports both absolute caps (a fixed amount in the vault's underlying asset) and relative caps (a percentage of total vault assets).

### Per-Function Timelocks

V2 vaults configure timelocks on a per-function basis rather than a single vault-wide timelock. High-impact actions (such as enabling new adapters, changing fees, or removing the Sentinel) can carry longer timelocks than lower-impact actions, without slowing down routine operations.

Timelocks themselves cannot be decreased without going through the current timelock duration, which prevents a compromised Curator from rapidly shrinking the safety window before taking other actions.

### Sentinel Veto Authority

Any timelocked Curator action can be revoked by the Sentinel before its timelock expires. This pairs with the Sentinel's broader safety capabilities (see "Roles in V2 Vaults") to provide a meaningful check on Curator activity.

### Abdication

The Curator can permanently abdicate specific timelocked function selectors, making those configuration functions impossible to call in the future. For example, a vault can abdicate gate setter functions to permanently preserve permissionless access, or abdicate adapter-registry changes to constrain future adapter additions.

Abdication is a trust-hardening primitive. It allows a vault to credibly commit to suppliers that certain risk-expanding actions can never be taken, regardless of who holds the Curator role in the future. This is particularly relevant for institutional suppliers who require strong, code-enforced rules about a vault's risk envelope.

### Onchain Permissions: Gates and Allowlists

V2 vaults can be deployed permissioned or non-permissioned. Permissioned vaults can implement access controls via gate contracts at the vault level. This enables vault operators to deploy a broader range of access models, including private or restricted-access products, without requiring suppliers to interact with a separate front-end or wrapper contract.


# Prime Vaults

Prime vaults prioritize capital preservation, high withdrawability, strong oracle integrity, and maximum security. These vaults are designed for users seeking conservative exposure and dependable access to liquidity while earning yield consistent with a low-risk profile.

* **Asset Selection:** Blue-chip collateral assets with deep secondary markets, strong market structure, and low realized volatility.
  * Target assets are those capable of supporting large notional liquidations with limited market impact.
  * As a reference point, this category is generally limited to assets such as BTC, ETH, and wstETH.
* **High Withdrawable Liquidity:** Prime vaults maintain elevated targeted withdrawable liquidity thresholds based on the chain and the surrounding market ecosystem. Liquidity management is optimized to preserve a high level of withdrawable capital at all times, reducing withdrawal friction and improving resiliency under stressed conditions.
* **Timelock Policy (v2):** Prime vaults enforce the most restrictive per-selector timelock schedule. Key actions carry a 7-day timelock including all adapter and allocation cap management and structural gateway actions. `setForceDeallocatePenalty` carries a 1-day timelock — stricter than Balanced/Frontier — maximizing the reaction window for market participants in the event of adverse changes or compromise.

| Selectors                                                                                | Prime (days) |
| ---------------------------------------------------------------------------------------- | ------------ |
| setReceiveSharesGate, setSendSharesGate, setReceiveAssetsGate                            | Abdicate     |
| setSendAssetsGate, setAdapterRegistry, increaseTimelock, abdicateTimelock, removeAdapter | 7            |
| addAdapter, increaseRelativeCap, increaseAbsoluteCap                                     | 7            |
| setForceDeallocatePenalty                                                                | 1            |
| setPerformanceFee, setManagementFee                                                      | 1            |
| setIsAllocator, setPerformanceFeeRecipient, setManagementFeeRecipient                    | 0            |

* **Oracle Risk Considerations:** Prime vaults should not rely solely on hardcoded, manually maintained, or structurally misaligned oracle designs. Oracle configurations are expected to track collateral and debt relationships dynamically and support robust pricing integrity under stressed market conditions.


# Balanced Vaults (Previously Core)

Balanced vaults target moderate risk-adjusted yield by combining strong foundational collateral with selective exposure to higher-yielding opportunities. These vaults accept more market and implementation risk than Prime, but remain structured around controlled diversification, liquidity awareness, and disciplined exposure limits.

* **Asset Selection:** A mix of blue-chip collateral and select yield-bearing or moderately higher-risk markets that offer improved return potential without moving fully into frontier-style risk.
* **Liquidity Profile:** Moderate to high liquidity collateral assets, with the expectation that liquidation pathways remain viable but may be more sensitive to stress than Prime markets.
* **Timelock Policy (v2):** Balanced vaults apply a 7-day timelock to structural gateway and governance actions and a 3-day timelock to adapter additions and allocation cap changes. `setForceDeallocatePenalty` carries an approximately 1-hour timelock (\~0.05 days), enabling faster risk management response than Prime.

| Selectors                                                                                | Balanced (days) |
| ---------------------------------------------------------------------------------------- | --------------- |
| setReceiveSharesGate, setSendSharesGate, setReceiveAssetsGate                            | Abdicate        |
| setSendAssetsGate, setAdapterRegistry, increaseTimelock, abdicateTimelock, removeAdapter | 7               |
| addAdapter, increaseRelativeCap, increaseAbsoluteCap                                     | 3               |
| setForceDeallocatePenalty                                                                | \~0.05 (\~1 hr) |
| setPerformanceFee, setManagementFee                                                      | 1               |
| setIsAllocator, setPerformanceFeeRecipient, setManagementFeeRecipient                    | 0               |

* **Oracle Risk Considerations:** Balanced vaults may utilize **NAV-based, hardcoded, or otherwise constrained oracle designs** in cases where spot liquidity is limited or where direct market pricing is more vulnerable to manipulation. These structures may be appropriate where they better reflect underlying value, but they introduce additional valuation and operational diligence requirements.
* **Yield Expectation:** Competitive APY designed to improve upon Prime while remaining within a measured risk envelope.


# Frontier Vaults

Frontier vaults seek to maximize depositor yield by underwriting materially higher levels of market, liquidity, valuation, and operational risk. These vaults are intended for users willing to accept a higher probability of volatility, impaired liquidations, and valuation uncertainty in exchange for superior return potential.

* **Asset Selection:** Blue-chip, mid-cap, and emerging collateral assets, including more speculative or less-proven markets with greater upside and materially higher embedded risk.
* **Liquidity Profile:** Lower liquidity collateral assets, which increases liquidation complexity and the probability of slippage-driven insolvency during stress events.
* **Timelock Policy (v2):** Frontier vaults share the same per-selector timelock schedule as Balanced vaults. A 3-day timelock governs adapter and allocation cap changes; `setForceDeallocatePenalty` carries an approximately 1-hour timelock (\~0.05 days), enabling rapid risk parameter adjustment in volatile markets.

| Selectors                                                                                | Frontier (days) |
| ---------------------------------------------------------------------------------------- | --------------- |
| setReceiveSharesGate, setSendSharesGate, setReceiveAssetsGate                            | Abdicate        |
| setSendAssetsGate, setAdapterRegistry, increaseTimelock, abdicateTimelock, removeAdapter | 7               |
| addAdapter, increaseRelativeCap, increaseAbsoluteCap                                     | 3               |
| setForceDeallocatePenalty                                                                | \~0.05 (\~1 hr) |
| setPerformanceFee, setManagementFee                                                      | 1               |
| setIsAllocator, setPerformanceFeeRecipient, setManagementFeeRecipient                    | 0               |

* **Oracle Risk Considerations:** Frontier vaults may rely on **NAV-based, hardcoded, or otherwise specialized oracle constructions** where spot-market liquidity is insufficient or where observable onchain prices are especially vulnerable to manipulation. These oracle designs may be necessary in frontier markets, but they increase the importance of valuation methodology, monitoring, and conservative parameterization.
* **Yield Expectation:** Highest APY among the vault categories, compensating depositors for materially elevated market and insolvency risk.


# Gauntlet Partner Vaults: Bespoke Risk Strategies

Gauntlet’s Partner Vaults support bespoke strategies aligned with partner goals and product requirements. These strategies can support partner-led earn programs, tokenized vault structures, and other custom DeFi integrations, while still applying Gauntlet’s diligence standards, risk management process, and ongoing market oversight.

<a href="https://form.typeform.com/to/wL0KbKAT?utm_source=web&#x26;utm_medium=vaultbook&#x26;utm_campaign=home" class="button primary" data-icon="circle-right">Get in touch</a>


# Curation Methodology & Risk Factor Overview

Central to our curation approach is ensuring vaults meet our robust risk guidelines, are attractive to the DeFi community, and remain resilient enough to handle inherent crypto market volatility.

We take stock of various risk factors to inform our vault actions.

<figure><img src="/files/bm5nNyAQrnKouxrdUKbK" alt=""><figcaption></figcaption></figure>


# Due Diligence

Our Vaults follow a disciplined risk management process designed to support resilience across changing market conditions. Before Gauntlet curates a new market and collateral asset, we conduct due diligence across both market-level and asset-level risks.

This review incorporates information from protocol teams, public documentation, on-chain data, technical materials, and ongoing monitoring. The diligence process is designed to evaluate whether an asset or market is suitable for inclusion in a Gauntlet-curated vault, while accounting for liquidity, security, operational, and market structure considerations.

Core areas of review include:

1. **Market Demand and Existing Lending Usage**\
   Evaluation of the asset’s use case, current and potential borrow demand, comparable lending markets, utilization trends, and relevance to vault depositors.
2. **Liquidity, Slippage, and Redemption Risk**\
   Review of on-chain liquidity, trading depth, liquidation feasibility, redemption mechanics, withdrawal timelines, liquidity backstops, and any gates or restrictions.
3. **Smart Contract and Technical Risk**\
   Review of contract architecture, audits, upgradeability, access controls, privileged roles, testing practices, monitoring, and other technical dependencies.
4. **Oracle, Exchange Rate, and Valuation Risk**\
   Assessment of price feeds, NAV or exchange-rate methodology, oracle infrastructure, update frequency, fallback logic, and valuation transparency.
5. **Governance and Operational Risk**\
   Review of governance structure, multisig or admin controls, timelocks, key management, incident response processes, prior incidents, and operational readiness.
6. **Cross-Chain and Bridge Risk**\
   Where applicable, evaluation of bridge architecture, cross-chain supply controls, messaging dependencies, emergency pause processes, bridge audits, and related incident history.
7. **Counterparty, Custody, and Legal Risk**\
   For RWA, off-chain, or hybrid assets, review of underlying assets, custody arrangements, reserve reporting, legal structure, redemption rights, and relevant counterparty exposures.
8. **Team, Organization, and Track Record**\
   Review of the protocol’s operating history, legal entity or governance structure, prior integrations, audits, team experience, and ongoing communication channels.
9. **Yield Strategy and External Integration Risk**\
   For yield-generating assets or strategies, review of strategy mandate, allocation mechanics, external protocol dependencies, risk controls, transparency, and de-allocation procedures.
10. **Asset-Specific Mechanisms**\
    Review of any unique features such as rebasing, staking or unstaking queues, transfer restrictions, allowlists, fee mechanisms, protocol-owned liquidity, wrapped-asset design, or other non-standard mechanics.

Together, these categories help Gauntlet assess whether a market or asset is appropriate for a curated vault and determine the ongoing monitoring considerations required after onboarding.


# Automated Risk Management Solutions

We combine extensive risk oversight with sophisticated automatic risk rebalancing and yield optimization strategies to ensure our vaults are optimally allocated to lending markets in any market condition.

Our methodology incorporates sophisticated models for ***liquidity*****,&#x20;*****price trajectories*****, and&#x20;*****network congestion*** based on historical onchain data and simulated market stress events. We incorporate dynamic monitoring of broader market liquidity for all collateral assets to ensure that profitable liquidations will continue in severe market conditions.

Our strategies automatically rebalance out of lending pools when necessary (e.g. market instability) with increased risk profiles under the supervision of our experienced on-call risk management team. We include some examples of this in the Resources section.


# Market Allocation Strategy

Market allocation is the most impactful action influencing vault composition, with a central role in defining a vault’s risk profile and overall APY.

To inform our allocation strategy, we use fine-tuned Agent-Based Simulations (ABS) that model market scenarios and user interactions within DeFi protocols. Our methodology incorporates detailed models based on sophisticated agent models and simulations that interact with smart contracts.

When allocating to a market, there are three main actions we can take that impact a vault’s risk profile and APY:

1. **Adding a new market:** When a new market is added and supply is allocated, the vault APY will change based on the allocation percentage and the supply APY rate.
2. **Adjusting market allocations:** To ensure Gauntlet-curated Vaults remain optimized for risk-adjusted yield, our models constantly review market allocations and make necessary adjustments.
3. **Adjusting market caps:** The caps we set serve to limit vault exposure to any one market. A cap represents the total amount of supply that can be allocated to a particular market.


# Vault Incentives

Within Morpho, users can incentivize both vaults and markets via [Merkl](https://merkl.xyz/), a permissionless reward distribution protocol. Suppliers to Gauntlet vaults automatically receive any active incentives based on their vault positions.

## Merkl Distribution Types

Merkl supports several campaign structures, each suited to different incentive goals.

### Variable Reward Rate

A fixed token budget is allocated per second across all active suppliers, so APR is variable and adjusts as total liquidity in the vault or market changes.

**How it works:** Rewards are distributed proportionally based on time-weighted liquidity. Early participants earn a higher share before additional liquidity enters. As more suppliers join, rewards dilute proportionally.

|          |                                                                                         |
| -------- | --------------------------------------------------------------------------------------- |
| **Pros** | Early entrants earn elevated APR; straightforward budget planning for campaign creators |
| **Cons** | Yields dilute as TVL grows; later participants earn less than early ones                |

***

### Fixed Reward Rate

Users earn a predefined amount of rewards per unit of liquidity at a fixed rate. Campaigns can be denominated in tokens or in dollar terms.

**How it works:** Each supplier earns a consistent APR regardless of how much total liquidity is in the pool. The campaign ends when the budget is exhausted.

|          |                                                                                                      |
| -------- | ---------------------------------------------------------------------------------------------------- |
| **Pros** | Predictable yield for suppliers; can be structured in token or dollar terms                          |
| **Cons** | Campaign creator's cost scales directly with participation; budget may go unspent if TVL remains low |

***

### Capped Reward Rate

Functions like a variable rate campaign but with a maximum APR ceiling set by the campaign creator.

**How it works:** APR adjusts with TVL but cannot exceed the defined cap. This prevents early entrants from capturing disproportionately high rewards during low-liquidity bootstrapping periods.

|          |                                                                            |
| -------- | -------------------------------------------------------------------------- |
| **Pros** | Sustainable budget distribution; prevents APR spikes from low initial TVL  |
| **Cons** | Less upside for early participants compared to uncapped variable campaigns |

***

### Target Total APR

The campaign tops up yield to a defined minimum APR target. Rewards are only distributed when native yield falls below the target; no incentives are paid out when organic yield meets or exceeds it.

**How it works:** Merkl calculates the gap between current native yield and the target, distributing only enough rewards to close that gap. Incentive spend automatically decreases as organic yield grows.

|          |                                                                                                    |
| -------- | -------------------------------------------------------------------------------------------------- |
| **Pros** | Most capital-efficient structure; spend declines automatically as organic yield increases          |
| **Cons** | Limited protocol availability; requires reliable native yield data to calculate the gap accurately |


# Vault Fees

Gauntlet keeps fees competitive across all Morpho vaults. The fee structure differs between Morpho v1 and v2.

## Morpho v1

Morpho v1 vaults use a single performance-based fee. There is no management fee component.

**Performance Fee** — a percentage of the actual interest accrued onchain from the underlying variable rate markets. Capped at 50% of generated interest. The performance fee applies to native yield only and is not charged on rewards earned through incentive campaigns.

The fee rate and recipient are controlled by the vault owner. Changes take effect immediately with no timelock delay.

## Morpho v2

Morpho v2 vaults introduce a dual-fee model managed by the Curator. Both fee parameters are subject to timelock protections, meaning changes do not take effect immediately — this protects depositors from sudden fee increases.

**Performance Fee** — a percentage of vault-generated yield from allocated assets. Capped at 50% of generated interest. As with v1, this applies to native yield only.

**Management Fee** — an annual fee charged on total deposited assets. Capped at 5% per year. It accrues incrementally during interest calculations rather than as a lump-sum charge.

## Fee Collection

Fees in both v1 and v2 are collected by minting new vault shares to the designated fee recipient rather than withdrawing principal. Recipients must actively call `redeem()` to convert shares into the underlying asset — fees are not automatically transferred to a wallet.


# Vault Curation Considerations: A Deeper Dive

In this section, we dive into our approach to vault curation and touch on several topics, including risk exposure, market utilization, asset liquidity, and liquidations.

<table data-card-size="large" data-view="cards"><thead><tr><th></th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td>Risk Exposure</td><td><a href="/pages/VeKGtjNd4rzG8qoQmvLz">/pages/VeKGtjNd4rzG8qoQmvLz</a></td></tr><tr><td>Market Utilization</td><td><a href="/pages/J1wmJzrgXk6OHDtNOgDH">/pages/J1wmJzrgXk6OHDtNOgDH</a></td></tr><tr><td>Market Rate</td><td><a href="/pages/215PLUc3InbnRxT3EPqN">/pages/215PLUc3InbnRxT3EPqN</a></td></tr><tr><td>Asset Liquidity</td><td><a href="/pages/no13kGkLc9UC9y0EkXa0">/pages/no13kGkLc9UC9y0EkXa0</a></td></tr><tr><td>Liquidations and Liquidators</td><td><a href="/pages/vhhqMl31HXEP6diOkJ26">/pages/vhhqMl31HXEP6diOkJ26</a></td></tr></tbody></table>


# Risk Exposure

The primary risk in lending markets stems from insolvent debt, which occurs when risky positions (health factor < 1) aren't liquidated promptly. This typically happens during market stress, when collateral prices fall sharply, and insufficient onchain liquidity makes liquidations unprofitable. Since liquidators operate on profit incentives, they won't act on underwater positions if market conditions make liquidation unprofitable.

Our market exposure strategy quantifies potential insolvent debt under severe market conditions. We analyze two key metrics:

* Price risk: Maximum expected daily price decline
* Liquidity risk: Maximum expected daily DEX liquidity reduction

If a market's exposure under an X% drop in the collateral asset price exceeds the liquidity available during a Y% liquidity crunch, we take action to decrease our exposure. We determine X and Y based on historical data, typically setting:

* X = the 99th percentile day-over-day price drop
* Y = the 99th percentile day-over-day drop in DEX liquidity over the past year

We reduce our position if a market's potential exposure under these stress conditions exceeds available liquidation capacity. This conservative approach applied to Gauntlet Prime and Balanced vaults, can maintain near-zero insolvency risk for our vaults, targeting insolvent debt below 10 basis points of total vault TVL even in extreme scenarios.

<div><figure><img src="/files/YivhoaqkHegfDUoUKbIN" alt=""><figcaption></figcaption></figure> <figure><img src="/files/6VQQAagfxnkef5I4wd78" alt=""><figcaption></figcaption></figure></div>

We continuously simulate the expected number of liquidations and the net volume over adverse price and liquidity scenarios. As described above, when expected insolvencies under the prescribed liquidity and price drawdown conditions exceed our tolerance thresholds, we reduce our vault’s exposure to the at-risk markets as much as possible. This entails reallocating liquidity from markets that are more likely to experience insolvency to a safer market early and often. We will reallocate supply to the idle market if no suitable lending markets exist.

We actively monitor leveraged positions on other prominent DeFi protocols such as Aave, Compound, Spark, and Gearbox. Significant liquidations on these protocols can rapidly deplete the liquidity available for liquidations on Morpho. By monitoring the risk profiles of these protocols, we can anticipate and preemptively adjust our vault’s exposure to markets with bad debt risk.


# Market Utilization

Utilization of any allocated market should not exceed 90% for an extended period of time (>48 hours). Beyond this optimal utilization point, both borrow and supply APYs increase rapidly, which, while beneficial for suppliers in the short term, compels borrowers to unwind positions, reducing long-term yield.

<figure><img src="/files/Ph9s33MBTAIgZKjUex3n" alt=""><figcaption></figcaption></figure>


# Market Rate

Borrow and supply yields should align with market rates to retain suppliers and borrowers:

* Stablecoin supply and borrow APYs should not differ from stablecoin rates on other DeFi protocols by more than 1-3%.
* WETH staking yields (currently around 4%) should upper bound the WETH borrow rates using wstETH (LRT/LSTs) collateral.

Morpho markets are single collateral/supply markets (as opposed to blended), which increases capital efficiency. Rates can be targeted to be superior for both borrowing (lower) and supply (higher). Ensuring competitive borrow and supply rates helps retain borrowers, facilitating sustainable yield for suppliers in the vault.


# Asset Liquidity

Morpho introduces “idle markets” that allow Gauntlet, as a curator, to ensure that some amount of liquidity is always available for withdrawals.

We constantly monitor overall market liquidity and leverage and rebalance our vault supply allocation in accordance with the solution to the following optimization problem:

Determine a supply allocation that maximizes vault APY subject to the following constraints:

* Expected liquidations under specified price and liquidity drawdowns should remain below a predetermined tolerance level based on current market conditions.
* Resulting borrow and supply rates competitively must stay within a predetermined tolerance of relevant market rates.
* Market utilization must stay between 88-92%.
* Liquidity available for immediate withdrawals must be greater than a predetermined withdrawal amount (e.g., 10% of vault deposits available for immediate withdrawal at all times).


# Liquidations and Liquidators

A reliable liquidator ecosystem is essential for managing unhealthy borrow positions before market deterioration leads to insolvencies. We actively monitor this ecosystem through ongoing communication with Morpho's liquidation teams.

Liquidators operate through two main strategies.

1. **The flash loan approach** starts by borrowing the debt asset from a DEX, repaying the borrower's debt, claiming collateral, and finally swapping collateral back to the debt asset to close the loan.
2. **The inventory approach** starts with liquidators holding WETH or stablecoins, swapping to the required debt asset, repaying debt and claiming collateral, and then converting collateral back to their inventory asset for profit.

For liquidations to remain profitable and efficient, liquidators need:

* Low slippage when selling claimed collateral
* Low slippage when purchasing debt assets

Our risk management framework supports this ecosystem by maintaining collateral at risk below key liquidity thresholds and keeping borrowed assets within sustainable liquidation limits. These thresholds are dynamically adjusted based on current liquidity levels with conservative buffers, ensuring market stability even during significant liquidity drawdowns.


# Morpho Adaptive Curve IRM

The AdaptiveCurveIRM is Morpho Blue's native interest rate model. It targets a **90% utilization ratio** by continuously adjusting an internal rate anchor. This page explains how the curve works, how the anchor adapts over time, and how quickly rates can move at different utilization levels.

### The Rate Curve

At any point in time, the borrow rate is a function of two inputs:

* **Current utilization** `U` - the share of supplied assets currently borrowed
* **`rateAtTarget`** - an internal state variable representing the borrow rate at exactly 90% utilization

The curve is piecewise linear with a kink at the 90% target. Below the kink it is shallow; above it is steep.

```
// err = (U - 0.90) / normFactor,  bounded to [-1, +1]
// normFactor = (1 - 0.90) above target, 0.90 below target

if err < 0:
  r = ((1 - 1/C) × err + 1) × rateAtTarget

if err >= 0:
  r = ((C - 1) × err + 1) × rateAtTarget

// C = 4 (curve steepness)
```

This produces a fixed multiplier structure regardless of where `rateAtTarget` sits:

| Utilization | Multiplier | Example (rateAtTarget = 4%) |
| ----------- | ---------- | --------------------------- |
| 0%          | 0.25×      | 1.00%                       |
| 90% (kink)  | 1.00×      | 4.00%                       |
| 100%        | 4.00×      | 16.00%                      |

The **shape of the curve never changes** — only the anchor moves. If `rateAtTarget` doubles, every point on the curve doubles with it.

#### Key Parameters

| Parameter             | Value  | Description                                        |
| --------------------- | ------ | -------------------------------------------------- |
| `TARGET_UTILIZATION`  | 90%    | Kink point; borrow rate equals `rateAtTarget` here |
| `CURVE_STEEPNESS` (C) | 4      | Max rate = 4× anchor; min rate = 0.25× anchor      |
| `ADJUSTMENT_SPEED`    | 50/yr  | Controls how fast `rateAtTarget` adapts            |
| `MIN_RATE_AT_TARGET`  | 0.1%   | Floor on `rateAtTarget`                            |
| `MAX_RATE_AT_TARGET`  | 1,200% | Ceiling on `rateAtTarget`                          |

***

### The Adaptive Mechanism

Between market interactions, `rateAtTarget` drifts continuously based on the signed error between current utilization and the 90% target.

```
speed            = ADJUSTMENT_SPEED × err       // 50/yr × [-1, +1]
elapsed          = block.timestamp - lastUpdate

endRateAtTarget  = startRateAtTarget × exp(speed × elapsed)
```

The further utilization deviates from target, the faster the anchor moves:

* **U > 90%** - error is positive, `rateAtTarget` rises. Higher rates attract new supply and discourage borrowing until utilization falls back to target.
* **U < 90% -** error is negative, `rateAtTarget` falls. Lower rates stimulate borrowing and may cause suppliers to exit until utilization recovers.
* **U = 90%** - error is zero, `rateAtTarget` is unchanged. This is the only stable fixed point.

### Rate Velocity

#### Borrow Rate at Each Utilization Level

The table below shows the instantaneous borrow rate and the rate after 5 days of sustained utilization, starting from `rateAtTarget = 4%`.

| Util | err  | rAT t=0 | rAT t=5d | Borrow t=0 | Borrow t=5d | Change | Max rate t=0 | Max rate t=5d |
| ---- | ---- | ------- | -------- | ---------- | ----------- | ------ | ------------ | ------------- |
| 90%  | 0.00 | 4.00%   | 4.00%    | 4.00%      | 4.00%       | +0%    | 16.00%       | 16.00%        |
| 91%  | 0.10 | 4.00%   | 4.28%    | 5.20%      | 5.57%       | +7%    | 16.00%       | 17.13%        |
| 92%  | 0.20 | 4.00%   | 4.59%    | 6.40%      | 7.34%       | +15%   | 16.00%       | 18.35%        |
| 93%  | 0.30 | 4.00%   | 4.91%    | 7.60%      | 9.33%       | +23%   | 16.00%       | 19.65%        |
| 94%  | 0.40 | 4.00%   | 5.26%    | 8.80%      | 11.57%      | +32%   | 16.00%       | 21.04%        |
| 95%  | 0.50 | 4.00%   | 5.63%    | 10.00%     | 14.08%      | +41%   | 16.00%       | 22.53%        |
| 96%  | 0.60 | 4.00%   | 6.03%    | 11.20%     | 16.89%      | +51%   | 16.00%       | 24.13%        |
| 97%  | 0.70 | 4.00%   | 6.46%    | 12.40%     | 20.03%      | +62%   | 16.00%       | 25.84%        |
| 98%  | 0.80 | 4.00%   | 6.92%    | 13.60%     | 23.52%      | +73%   | 16.00%       | 27.68%        |
| 99%  | 0.90 | 4.00%   | 7.41%    | 14.80%     | 27.41%      | +85%   | 16.00%       | 29.64%        |
| 100% | 1.00 | 4.00%   | 7.93%    | 16.00%     | 31.74%      | +98%   | 16.00%       | 31.74%        |

*rAT = rateAtTarget. Max rate = borrow rate at 100% utilization given the adapted rateAtTarget. Protocol fee not applied.*

#### Time for `rateAtTarget` to Reach a Level

Starting from `rateAtTarget = 4%`, days required to reach each target rate at constant utilization.

```
t = ln(targetRate / startRate) / (ADJUSTMENT_SPEED × err) × 365
```

| Constant UR | To 7%     | To 8%     | To 9%     | To 10%    |
| ----------- | --------- | --------- | --------- | --------- |
| 91%         | 40.4 days | 50.0 days | 58.5 days | 66.1 days |
| 92%         | 20.2 days | 25.0 days | 29.2 days | 33.0 days |
| 93%         | 13.5 days | 16.7 days | 19.5 days | 22.0 days |
| 95%         | 8.1 days  | 10.0 days | 11.7 days | 13.2 days |
| 97%         | 5.8 days  | 7.1 days  | 8.3 days  | 9.4 days  |
| 100%        | 4.1 days  | 5.1 days  | 5.9 days  | 6.7 days  |

*Assumes constant utilization throughout. In practice, rising rates will attract new supply and reduce utilization before these levels are reached.*

#### Doubling Time by Utilization

How many days of sustained utilization before `rateAtTarget` and every point on the curve doubles.

| Utilization | err  | Speed   | Doubling Time |
| ----------- | ---- | ------- | ------------- |
| 91%         | 0.10 | 5.0/yr  | 50.6 days     |
| 92%         | 0.20 | 10.0/yr | 25.3 days     |
| 93%         | 0.30 | 15.0/yr | 16.9 days     |
| 94%         | 0.40 | 20.0/yr | 12.6 days     |
| 95%         | 0.50 | 25.0/yr | 10.1 days     |
| 96%         | 0.60 | 30.0/yr | 8.4 days      |
| 97%         | 0.70 | 35.0/yr | 7.2 days      |
| 98%         | 0.80 | 40.0/yr | 6.3 days      |
| 99%         | 0.90 | 45.0/yr | 5.6 days      |
| 100%        | 1.00 | 50.0/yr | 5.1 days      |

***

### Supply APY vs Borrow APY

`rateAtTarget` is not the supply APY. The relationship between the two is:

```
supplyAPY = borrowAPY × utilization × (1 - protocolFee)
```

At 90% utilization, a 4% borrow APY with a 15% protocol fee yields a supply APY of approximately 3.0&#x36;**%**. The gap between borrow and supply APY narrows at higher utilization but never fully closes due to the protocol fee.

***

### Risk Considerations

**Slow-moving markets.** A market pinned at 91% adapts slowly - `rateAtTarget` takes \~50 days to double. This is insufficient pressure for rapid rebalancing. Curators should treat sustained utilization above 91% as a signal to add supply capacity proactively.

**Fast-moving markets.** Above 95% utilization, the anchor can double in under 10 days. Combined with the 4× curve multiplier, the max borrow rate can reach multiples of its starting value quickly, which may trigger liquidations if borrowers are not monitoring positions.

**The 4× leverage on volatility.** Because the max rate is always `C × rateAtTarget`, any drift in the anchor is amplified fourfold at the top of the curve. A `rateAtTarget` move from 4% to 8% moves the max rate from 16% to 32%.

**`rateAtTarget` as a market health signal.** Rising `rateAtTarget` indicates sustained over-utilization. Falling `rateAtTarget` indicates sustained under-utilization!


# Resources

## Vault Management in Action

* [Usual USD0++ Depeg](https://x.com/gauntlet_xyz/status/1877825680756613372)
* [ByBit Exploit](https://x.com/gauntlet_xyz/status/1893029338368614776)
* ezETH Liquidity Crunch: [tweet](https://x.com/gauntlet_xyz/status/1783501801221943330), [forum post](https://forum.morpho.org/t/gauntlet-lrt-core-vault-market-update-4-24-2024-ezeth-price-volatility/578).

## Morpho Docs

* [Overview](https://docs.morpho.org/morpho/overview)
* [Vaults](https://docs.morpho.org/learn/concepts/vault-v2/)
* [Curation](https://docs.morpho.org/curate/)

## Gauntlet Content

* [Gauntlet-curated Vaults Launch on Morpho](https://www.gauntlet.xyz/resources/gauntlet-launches-weth-usdc-and-mkr-vaults-on-morpho)
* [Unpacking Our Morpho Vault Curation Methodology](https://www.gauntlet.xyz/resources/under-the-hood-unpacking-our-morpho-vault-curation-methodology)


# Kamino Vaults

Welcome to our Kamino VaultBook page.

We deployed Gauntlet-curated vaults on Kamino in November 2025, bringing our institutional-grade curation methodology to lending on Solana. Deploying vaults on Kamino, the largest lending platform on Solana, will drive liquidity to the Kamino Lend ecosystem and continue to build internet capital markets on Solana.

| Vault Name                                                                   |
| ---------------------------------------------------------------------------- |
| [**Gauntlet USDC Prime**](https://kamino.com/lend/gauntlet-usdc-prime)       |
| [**Gauntlet SOL Balanced**](https://kamino.com/lend/gauntlet-sol-balanced)   |
| [**CASH Earn**](https://kamino.com/lend/cash-earn)                           |
| [**Gauntlet USDC Frontier**](https://kamino.com/lend/gauntlet-usdc-frontier) |

<table data-view="cards"><thead><tr><th></th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td>Kamino Vaults Overview</td><td><a href="/pages/kBld0mukwgg5TiY6Y8Xp">/pages/kBld0mukwgg5TiY6Y8Xp</a></td></tr><tr><td>Vault Risk Categories</td><td><a href="/pages/oBRO7gQ5bZoOtdfVA2yW">/pages/oBRO7gQ5bZoOtdfVA2yW</a></td></tr><tr><td>Risk Management and Curation Methodology</td><td><a href="/pages/4HSAHGYjhTgbS3sOzNiN">/pages/4HSAHGYjhTgbS3sOzNiN</a></td></tr></tbody></table>


# Kamino Vaults Overview

Kamino Lending Vaults deploy funds across Kamino Lend Markets, with automatic rebalancing strategies run by curators like Gauntlet. We employ our robust curation framework to drive optimized lending yields for suppliers in our vaults.

### Supplier

Users seeking yield can supply assets into Gauntlet-curated Kamino Vaults. Those assets are then deployed across Kamino Lend markets and are accessible to borrowers who deposit collateral and pay a borrow APY.

### **Curator/risk manager**

As curator, Gauntlet runs yield strategies on our vaults and oversees the risk management of each vault. We define the vault’s allocations and diligence new markets. As curator we can take the following actions:

* **Allocate user supply** across Kamino markets
* **Manage supply caps** for different markets to manage risk and optimize yield. Caps define how much of a single vault’s supply asset can be allocated to a specific market.
* **Set vault fees** to earn a proportion of the interest
* **Real-time risk management** on allocations (deallocating from markets when warranted) to drive vault sustainability, and continuous due diligence on allocated markets based on our risk criteria.

In line with their non-custodial nature, all supply and withdrawal transactions can only be completed by the user.


# Vault Risk Categories

### **Prime Vaults**

Prime Vaults offer conservative, low-risk yields to suppliers. These Vaults allocate supply to maximize risk-adjusted yield while targeting minimal risk of insolvent debt even under extreme market conditions.

Prime Vaults will allocate to markets that meet the following criteria:

* A blend of super high liquidity blue chip collateral.
* High price correlation between supply and collateral tokens.

Some markets may be considered that do not meet these exacting criteria; however, where this is the case, the supply caps and LLTV ratios will be set conservatively.

### **Balanced Vaults**

Balanced Vaults target higher risk-adjusted yield, allocating to a blend of large and lower cap collateralized markets while ensuring exposure to any one asset remains within acceptable bounds. Collateral Selection is based on the following factors:

* Active management of vault supply to market supply ratios to ensure availability of withdrawal liquidity.
* Sufficient liquidity and slippage to perform healthy liquidations in severe market conditions.

### Frontier Vaults

Frontier Vaults target the highest risk-optimized yields across Kamino Markets by allocating to higher-volatility markets in exchange for the potential for greater supplier returns. Like all Gauntlet-curated vaults, Frontier Vaults adhere to our collateral evaluation and due diligence requirements that apply across all our vault risk categories:

* **Due diligence:** All underlying markets must pass Gauntlet’s due diligence process.
* **Audits:** Certified audits from top industry auditors are required before vault inclusion.
* **Active curation:** Regular risk parameter reviews ensure vaults continually align with existing market conditions.


# Risk Management and Curation Methodology

### Automated Risk Management Solutions

We combine extensive risk oversight with sophisticated automatic risk rebalancing and yield optimization strategies to ensure our vaults are optimally allocated to lending markets in any market condition.

Our methodology incorporates sophisticated models for ***liquidity*****,&#x20;*****price trajectories*****, and&#x20;*****network congestion*** based on historical onchain data and simulated market stress events. We incorporate dynamic monitoring of broader market liquidity for all collateral assets to ensure that profitable liquidations will continue in severe market conditions.

Our strategies automatically rebalance out of lending pools when necessary (e.g. market instability) with increased risk profiles under the supervision of our experienced on-call risk management team. We include some examples of this in the Resources section.

### Market Allocation Strategy

Market allocation is the most impactful action influencing vault composition, with a central role in defining a vault’s risk profile and overall APY.

To inform our allocation strategy, we use fine-tuned optimization algorithms tested over historical and simulated market scenarios to target the best risk-adjusted returns.

When allocating to a market, there are three main actions we can take that impact a vault’s risk profile and APY:

1. **Adding a new market:** When a new market is added and supply is allocated, the vault APY will change based on the allocation percentage and the supply APY rate.
2. **Adjusting market allocations:** To ensure Gauntlet-curated Vaults remain optimized for risk-adjusted yield, our models constantly review market allocations and make necessary adjustments.
3. **Adjusting market caps:** The caps we set serve to limit vault exposure to any one market. A cap represents the total amount of supply that can be allocated to a particular market.
4. **Collaborate with market owners:** To optimize risk parameters and enhance market efficiency.


# Drift Vaults

Welcome to our Drift VaultBook, where you can learn about our Drift Vaults, our approach to curation, and the various risk considerations that inform our strategies.

Our existing Drift strategies are outlined below. You can click through to each strategy's page on the left for a deeper dive into how each strategy functions.

[**Read the hJLP Whitepaper here**](https://www.gauntlet.xyz/resources/hedged-jlp-whitepaper).

<table><thead><tr><th width="280.32421875">Strategy</th><th width="223.25">Links to Drift</th></tr></thead><tbody><tr><td><a href="/pages/1sHgCbsIjTN4PMerbxn4">hJLP 1x</a></td><td><a href="https://app.drift.trade/vaults/CoHd9JpwfcA76XQGA4AYfnjvAtWKoBQ6eWBkFzR1A2ui">Vault</a> | <a href="https://app.drift.trade/?authority=CoHd9JpwfcA76XQGA4AYfnjvAtWKoBQ6eWBkFzR1A2ui">Live Positions</a></td></tr><tr><td><a href="/pages/qCpHE0AdyP8uSiZiETcZ">hJLP 2x</a></td><td><a href="https://app.drift.trade/vaults/JCigGWJJRCPas7B9eUe2JgkyqQjGxMKkvZcJ7VQaNBqx">Vault</a> | <a href="https://app.drift.trade/?authority=JCigGWJJRCPas7B9eUe2JgkyqQjGxMKkvZcJ7VQaNBqx">Live Positions</a></td></tr><tr><td><a href="/pages/qCpHE0AdyP8uSiZiETcZ">hJLP Max</a></td><td><a href="https://app.drift.trade/vaults/strategy-vaults/FHF1EiAW12oCrHRh3Ycd1ZZQgCHRPRaC5wQFC68Twafq">Vault</a> | <a href="https://app.drift.trade/JLP?authority=FHF1EiAW12oCrHRh3Ycd1ZZQgCHRPRaC5wQFC68Twafq">Live Positions</a></td></tr><tr><td><a href="/pages/UQpDi9e8CczDZa2HMMJU">Gauntlet Basis Alpha</a></td><td><a href="https://app.drift.trade/vaults/J6hcyp5rAsb1h7Qwgk763X6e2WnHgZa489VCE5VXgHLT">Vault</a> | <a href="https://app.drift.trade/?authority=J6hcyp5rAsb1h7Qwgk763X6e2WnHgZa489VCE5VXgHLT">Live Positions</a></td></tr><tr><td><a href="/pages/ko70HZntiBZh4XiRXUWW">SOL Plus</a></td><td><a href="https://app.drift.trade/vaults/4r3HvmEMqWFc5jgwfNQvzDnk7xb8JdhQ6AtcqQVLNXgP">Vault</a> | <a href="https://app.drift.trade/?authority=4r3HvmEMqWFc5jgwfNQvzDnk7xb8JdhQ6AtcqQVLNXgP">Live Positions</a></td></tr><tr><td><a href="/pages/ko70HZntiBZh4XiRXUWW">cbBTC Plus</a></td><td><a href="https://app.drift.trade/vaults/5LVLbAddNbAiKscWqYV8GHwv6STb3xmqhhc6W5HoHVVg">Vault</a> | <a href="https://app.drift.trade/?authority=5LVLbAddNbAiKscWqYV8GHwv6STb3xmqhhc6W5HoHVVg">Live Positions</a></td></tr><tr><td><a href="/pages/ko70HZntiBZh4XiRXUWW">JitoSOL Plus</a></td><td><a href="https://app.drift.trade/vaults/strategy-vaults/4F7c7v9cZHatcZLy9TZFv1jrRrReACLBxciMkbDqVkfQ">Vault</a> | <a href="https://app.drift.trade/?authority=4F7c7v9cZHatcZLy9TZFv1jrRrReACLBxciMkbDqVkfQ">Live Positions</a></td></tr><tr><td><a href="/pages/ko70HZntiBZh4XiRXUWW">dSOL Plus</a></td><td><a href="https://app.drift.trade/vaults/strategy-vaults/6aowo7AoE6rw8CS6knd746XiRysuiEjs9YpZyHRAMnor">Vault</a> | <a href="https://app.drift.trade/?authority=6aowo7AoE6rw8CS6knd746XiRysuiEjs9YpZyHRAMnor">Live Positions</a></td></tr><tr><td><a href="/pages/ko70HZntiBZh4XiRXUWW">DRIFT Plus</a></td><td><a href="https://app.drift.trade/vaults/strategy-vaults/8ziYC1onrdfq2KhRQamz392Ykx8So48uWzd3f8tXJpVz">Vault</a> | <a href="https://app.drift.trade/?authority=8ziYC1onrdfq2KhRQamz392Ykx8So48uWzd3f8tXJpVz">Live Positions</a></td></tr><tr><td><a href="/pages/ko70HZntiBZh4XiRXUWW">WETH Plus</a></td><td><a href="https://app.drift.trade/vaults/strategy-vaults/An26iG1Cx5W8tsxa8cHg8zjt7G15rBBj6swextzwMGCG">Vault</a> | <a href="https://app.drift.trade/wETH?authority=An26iG1Cx5W8tsxa8cHg8zjt7G15rBBj6swextzwMGCG">Live Positions</a></td></tr></tbody></table>


# Drift Vaults Overview

Drift Protocol is a strategic partner in Gauntlet's vault strategy implementation. As a decentralized exchange built on the Solana blockchain, Drift provides essential infrastructure for risk-adjusted vault curation.

Our partnership with Drift Protocol brings several crucial advantages to our strategy implementation. As a high-performance perpetual futures trading platform, Drift provides deep liquidity pools that enable the efficient execution of complex trading strategies. Their advanced cross-margining capabilities and transparent on-chain order book system create an ideal foundation for sophisticated trading operations. Furthermore, Drift's robust SDK enables seamless integration with Gauntlet's systems, facilitating smooth strategy execution.

This integration delivers significant benefits to Gauntlet's vault curation. The platform enables efficient position management across multiple assets while reducing counterparty risk through its decentralized execution model. Through Drift's cross-margining capabilities, Gauntlet achieves optimized capital utilization, enhancing the overall efficiency of our strategies. The partnership also provides access to real-time market data, enabling precise strategy execution and risk management.


# Our Approach to Drift Strategies

Individual strategy vaults like hJLP form the foundational layer of our vault curation on Drift. These strategies are designed to mitigate risks associated with providing liquidity to Jupiter's perpetual exchange while maintaining attractive returns.

<figure><img src="/files/XaggAJL84kDBGyIG1bhC" alt=""><figcaption></figcaption></figure>

The Gauntlet Basis Alpha (GBA) strategy implements a portfolio view across all basis trades. Starting with allocations to hJLP, SOL LST, and BTC Basis Trades, it will continuously and autonomously rebalance based on real-time market conditions, considering funding rates, liquidity conditions, trading volumes, and historical performance patterns. This removes the need for active management while maintaining sophisticated optimization. New assets may be added in the future, [see here](https://app.drift.trade/?authority=J6hcyp5rAsb1h7Qwgk763X6e2WnHgZa489VCE5VXgHLT) for current allocations.

The Beta + GBA Overlay strategies maintain exposure while still capturing basis yields. By supplying SOL or BTC as collateral to borrow stables for GBA deployment, these vaults can earn incremental yield on supplied digital assets.

Together, they create a comprehensive approach to yield generation that adapts to different vault user preferences while maintaining consistent risk management standards.


# User Flow

**1. Accessing Gauntlet Vaults**

• Navigate to the vaults page (<https://app.drift.trade/vaults>), where you’ll see a list of vaults showing APY, Age, TVL, and more.

*Protip: filter on 'Gauntlet' as manager to only see vaults curated by Gauntlet*

<figure><img src="/files/vaHPvl3d7qHAfjUfPDGm" alt=""><figcaption></figcaption></figure>

• Select a vault by clicking “View Vault” for details on performance, capacity, and strategy.

<figure><img src="/files/HHgUyVRiQOwpGjof6FgT" alt=""><figcaption></figcaption></figure>

**2. Depositing Funds**

• On the vault’s page, enter the amount you wish to deposit.

• Click “Confirm Deposit,” then approve the transaction in your connected wallet. Once confirmed, your share balance will be updated.

• Deposited funds typically have a redemption lock period (e.g., 3 days) before withdrawal is possible.

Note: because of slippage incurred while entering the strategy, your vault will initially show a negative return immediately following deposit; this is expected.

<figure><img src="/files/vfgE0fpeUtrpVCn0oMHZ" alt=""><figcaption></figcaption></figure>

**3. Tracking Performance**

• Vault Performance Tab: shows APY (7D/30D/90D), TVL, and metrics like Max Daily Drawdown. Track total earnings and ROI in real-time.

• Your Performance Tab: displays Current Balance, Total Earnings (All-Time), and ROI, along with a chart showing earnings, fees, and high-water marks over time.

• Overview Tab: Summarizes the vault’s strategy, risk profile, and relevant disclosures.

<figure><img src="/files/f3dLQCYyrLBme6LQEBut" alt=""><figcaption></figcaption></figure>

**4. Withdrawing Funds**

• Click “Withdraw” on the vault’s page and specify the amount (up to your vault balance).

• Withdrawals enter a redemption queue (e.g., 3 days). After this period, finalize the withdrawal to receive funds in your wallet. Any unclaimed amounts will be held in USDC.

• Note that share value changes (due to negative PnL or JLP premium) as well as performance fees collected may cause the final withdrawal amount to be lower than the initial request. Funds in the queue will not accrue further profits.

<figure><img src="/files/DOOdw7K192uvhm58OUGc" alt=""><figcaption></figcaption></figure>

**5. Managing Your Vault Position**

• Deposit More: You can add more funds anytime, subject to the vault’s capacity. Note that because the vault collects performance fees whenever a user interacts with the vault, new deposits may trigger a fee if the current vault balance is above the high watermark.

• Compound Earnings: Gains are typically reinvested automatically.

• Monitor Regularly: Check performance, funding rates, and protocol updates to ensure the strategy aligns with your risk tolerance.


# hJLP

Visit the [vault](https://app.drift.trade/vaults/CoHd9JpwfcA76XQGA4AYfnjvAtWKoBQ6eWBkFzR1A2ui).

## Overview <a href="#overview" id="overview"></a>

The hJLP (Hedged Jupiter Liquidity Provider) strategy is designed to mitigate risks associated with providing liquidity to Jupiter's perpetual exchange while maintaining attractive returns. This documentation provides a comprehensive overview of the implementation details, data processing mechanisms, hedging approaches, and execution management systems that power the strategy.

### Hedging Venue: Drift Protocol <a href="#hedging-venue-drift-protocol" id="hedging-venue-drift-protocol"></a>

Drift Protocol serves as the primary hedging venue for the hJLP strategy. The protocol maintains deep liquidity pools that enable large hedging transactions with minimal slippage. Its cross-margining capabilities allow for efficient capital utilization across multiple trading pairs, allowing the strategy to deposit JLP in the pool and create perpetual positions in multiple assets using the same collateral (JLP in this case). The transparent nature of the on-chain orderbook significantly reduces counterparty risk and enhances overall strategy security.

## Strategy Implementation <a href="#strategy-implementation" id="strategy-implementation"></a>

### **Core Flow** <a href="#strategy-implementation" id="strategy-implementation"></a>

The strategy implementation follows a process that begins when users deposit supported assets into the hJLP vault. These assets are automatically converted to JLP tokens through Jupiter's DEX, ensuring all user deposits are in the required token for the hedging strategy. The newly acquired JLP tokens are then deposited into Drift as collateral, enabling the opening of initial hedge positions based on current delta exposure in the JLP pool. The system maintains these positions through dynamic rebalancing, triggered either by predetermined time intervals or when positions deviate from target thresholds.

<figure><img src="/files/cz7XBRxEbNXVDBztIjBO" alt="" width="375"><figcaption></figcaption></figure>

### **Integration Architecture**

The strategy leverages Drift's vault infrastructure, which provides battle-tested security for user deposits and efficiently handles large volumes of deposits and withdrawals. The multi-asset support simplifies the user experience and broadens accessibility. Integration with Drift's SDK enables direct interaction with trading functions, immediate access to market data, and utilization of sophisticated order types for optimal hedge execution.

## Data Processing <a href="#data-processing" id="data-processing"></a>

### **Real-time Pipeline**

At the core of the hJLP strategy lies a sophisticated real-time data pipeline that continuously monitors the Jupiter Liquidity Pool. This system tracks JLP Pool composition across multiple assets including SOL, ETH, BTC, USDC, and USDT, while simultaneously monitoring perpetual position updates, JLP token supply changes, and aggregating price feeds from multiple sources to ensure reliability.

### **Delta Calculation**

The strategy employs precise mathematical formulas for delta calculations. For each asset in the JLP pool, the asset-specific delta is calculated as:

Copy

```
Δa = (spotLiquidity a - longPerp a + shortPerp a + undistributedFees) / jlpSupply
```

This formula incorporates the value of assets in JLP spot liquidity, total long and short perpetual positions, and undistributed fees waiting in escrow. The total portfolio delta is then computed as the sum of all asset-specific deltas.

### Hedging Strategies <a href="#hedging-strategies" id="hedging-strategies"></a>

Gauntlet has evaluated several hedging strategies, both temporal and bounded, and may employ any combination of the following, balancing risk mitigation with cost efficiency. The temporal strategies include a 5-minute hedge that provides aggressive delta neutrality with full offset every 5 minutes and a maximum slippage parameter of 10 bps. The hourly hedge offers a more balanced approach with lower trading costs, while the daily hedge provides the most cost-effective solution but accepts higher intraday exposure.

The bounded delta strategies present another approach to risk management. The 1% dollar bounds strategy rebalances when the dollar delta exceeds ±1%, providing continuous monitoring and balanced cost-risk management. Asset-specific bounds apply tailored thresholds up to 5%, with independent monitoring per asset. The 20%-10% bounds strategy employs a buffer zone approach with an upper bound of ±20% and a rebalance target of ±10%.

### Execution Management <a href="#execution-management" id="execution-management"></a>

The strategy implements sophisticated execution management techniques to optimize trade execution. Order splitting is determined by dividing the order size by the maximum single order size. TWAP implementation distributes execution time across splits, while liquidity-aware execution ensures optimal trade sizing based on available market liquidity and maximum allowed market impact.

***NOTE:*** Gauntlet does not match orders, size trades, execute, or settle transactions. Those processes are completed by the Drift SDK.


# hJLP 2x and hJLP Max

Visit the [2x vault ](https://app.drift.trade/vaults/JCigGWJJRCPas7B9eUe2JgkyqQjGxMKkvZcJ7VQaNBqx)and the [Max vault](https://app.drift.trade/vaults/strategy-vaults/An26iG1Cx5W8tsxa8cHg8zjt7G15rBBj6swextzwMGCG).

## Strategy Overview <a href="#strategy-overview" id="strategy-overview"></a>

Hedged JLP 2x is a strategy that provides double exposure to JLP yields while maintaining delta neutrality through strategic short positions on Drift Protocol. The strategy targets up to 2x leverage to amplify JLP yields, borrowing stablecoins on Drift's lending market (also called spot margin) to achieve this enhanced exposure. Through sophisticated position management and continuous monitoring, the strategy aims to maximize returns while carefully managing the associated risks of leveraged positions.

The Max vault uses the same mechanics, targeting the maximum leverage available based on LTVs, supply caps, and available liquidity.

<figure><img src="/files/IU9QELRFYFjYSLZzhiHP" alt="" width="375"><figcaption></figcaption></figure>

## Core Mechanics <a href="#core-mechanics" id="core-mechanics"></a>

The strategy achieves 2x exposure through a carefully balanced combination of techniques. When users deposit funds, the strategy leverages these deposits to create a 2x position in the JLP pool. The leveraged position is then delta-hedged through corresponding short positions in the underlying assets (SOL, ETH, BTC) on Drift Protocol. This process involves taking user supply in USDC, borrowing additional stablecoins to double the position size, converting the total capital into JLP tokens, and establishing corresponding hedge positions on Drift.

The borrowed stablecoins necessary for leverage incur ongoing interest charges that impact the strategy's net returns. These costs are actively monitored and factored into position management decisions, with the strategy continuously optimizing between leverage levels and borrowing costs to maintain optimal performance.

## Delta Hedging Implementation <a href="#delta-hedging-implementation" id="delta-hedging-implementation"></a>

The maintenance of delta-neutral positioning forms a crucial component of the strategy's risk management approach. The total hedge size is calculated as the product of asset exposure and the leverage factor, with the strategy targeting a delta near zero within acceptable deviation bounds (up to 5%). Position rebalancing occurs through a system that considers multiple factors, including delta exposure thresholds, regular time-based intervals, and market volatility events.

## Risk Management and Monitoring <a href="#risk-management-and-monitoring" id="risk-management-and-monitoring"></a>

The strategy employs comprehensive risk management systems that continuously monitor multiple aspects of position health. These systems track leverage ratios against safety thresholds, assess borrowing costs and their impact on returns, monitor delta exposure across all assets, and evaluate liquidation risk parameters. The availability of sufficient liquidity for hedging operations is constantly evaluated to ensure smooth strategy execution.

Liquidation prevention represents a critical aspect of risk management. The strategy implements a multi-layered approach to protection, combining conservative leverage limits with automated deleveraging triggers.

## Market and Technical Risk Considerations <a href="#market-and-technical-risk-considerations" id="market-and-technical-risk-considerations"></a>

The doubled leverage integral to the strategy amplifies both potential returns and losses. Market risks manifest primarily through price volatility in underlying assets, which can trigger larger position swings due to the leverage employed. While delta hedging helps mitigate directional exposure, extreme market movements can still impact strategy performance through increased rebalancing costs, high borrow interest, and potential liquidation scenarios.

From a technical perspective, the strategy faces smart contract risks despite thorough third-party audits. The reliance on multiple protocols (Jupiter, Drift) compounds smart contract risk from these dependencies. Position management confronts several operational challenges, including data feed reliability for accurate hedging, execution latency during high volatility periods, liquidity constraints on Drift affecting hedge placement, and interest rate fluctuations impacting borrowing costs.

## Architecture and Implementation <a href="#architecture-and-implementation" id="architecture-and-implementation"></a>

The strategy operates through non-custodial smart contracts that maintain user custody of funds through private key control. While contract upgrades and parameter changes remain possible, the system's core architecture ensures users retain ultimate control over their assets. Position management occurs through an automated system that handles real-time monitoring of leverage and exposure, rebalancing of hedge positions, adjustment of borrowing positions, and optimization of gas costs.


# Gauntlet Basis Alpha

Visit the [vault](https://app.drift.trade/vaults/J6hcyp5rAsb1h7Qwgk763X6e2WnHgZa489VCE5VXgHLT).

The Gauntlet Basis Alpha (GBA) strategy represents a step forward in portfolio management within the strategies offered. Rather than focusing on a single basis trade, GBA deploys capital across multiple delta-neutral strategies including hJLP, SOL basis, and BTC basis, among others.

See the [Live Positions](https://app.drift.trade/?authority=J6hcyp5rAsb1h7Qwgk763X6e2WnHgZa489VCE5VXgHLT) on Drift for the latest allocations.

The strategy continuously rebalances based on real-time market conditions, considering funding rates, liquidity conditions, trading volumes, and historical performance patterns. Additional assets may be added to the scope of basis trades in the future (subscribe to our [telegram channel](https://t.me/+TpuliaeWH3Y5Zjdh) to be notified). This approach can scale positions up to 5x leverage when conditions allow but always maintains its primary focus on optimizing risk-adjusted returns rather than chasing maximum yield.

<figure><img src="/files/e59ISUVDecm7442qleZJ" alt=""><figcaption></figcaption></figure>


# Gauntlet Plus

Your crypto, with extra yield on top. Gauntlet Plus vaults overlay delta neutral yields from Gauntlet Basis Alpha on top of your favorite crypto assets. This type of strategy is known as Beta/Alpha Overlays.

The Gauntlet Plus strategies represent a directional approach to portfolio construction. Designed specifically for the current market environment, these strategies solve a fundamental problem: how to generate sophisticated yields without giving up market exposure.

Available in a number of crypto denominations (see [full list here](/vaults/drift-vaults)), these strategies maintain the original asset exposure while using it as collateral to borrow stables, which is then deployed into the [GBA](/vaults/drift-vaults/gauntlet-basis-alpha) strategy. This creates two parallel return streams - possible market price appreciation (or depreciation) and delta-neutral basis yields - without requiring investors to exit their core positions.

<figure><img src="/files/dWkMjNIraxJJLYasFD12" alt=""><figcaption></figcaption></figure>

<figure><img src="/files/vxxjzs3sodvANXyjkYqF" alt=""><figcaption></figcaption></figure>


# Risk Considerations and Security

When using Gauntlet’s Vault strategies, vault users should understand several key risk categories:

## **Market Risks**

Price volatility in underlying assets and fluctuations in funding rates can significantly affect returns. Liquidity may dry up during high-volatility periods, and correlations between assets can break under stress. These factors require careful position sizing and robust risk management.

## **Operational Execution**

Execution slippage, especially in less liquid markets or during volatility spikes, can erode profits. Transaction timing is often critical, and even rare system downtime must be considered. Integrating multiple protocols demands thorough testing and meticulous attention to detail.

## **Smart Contract and Protocol Risks**

Upgrades and parameter changes can introduce new vulnerabilities. Despite third-party audits, users remain exposed to smart contract failures, market volatility, and potential socialized losses.

## **Leverage and Hedging Risks**

Some strategies use leverage, which amplifies both gains and losses. Position management errors, hedging delays due to limited liquidity, fluctuating borrowing costs, and liquidation during extreme market conditions are key concerns. The hedged vault may also face data or execution errors, inadequate liquidity on Drift for full delta hedging, and liquidation risk on hedge positions during periods of high volatility.

[Please read our full disclosures here](https://www.gauntlet.xyz/drift-hjlp-vault-disclaimer).<br>


# Disclosures

### **Agreement and Disclaimer**

**Last Updated:** December 11, 2024 Please read all of this.

By using any Gauntlet Vault, you acknowledge and agree that:

Gauntlet's (also “we” and “us”) provision of vault services is not investment, tax, legal, or technological advice. None of Gauntlet's vaults are depository or custodial products, and none of your digital assets are guaranteed by Gauntlet or any other person. We are not a fiduciary for any vault user, nor will we act as a broker, custodian, investment adviser, or asset manager through our provision of the vault services. Vault users will always deploy their assets at their own risk, with full understanding that (i) their digital assets may lose some or all of their market value;(ii) their digital asset positions may be liquidated partially or entirely as a result of parameters that they cannot control or change; (iii) that their digital assets may be compromised or stolen by malicious software attacks; and that (iv) their only recourse to prevent such risks after deploying to a vault is to fully withdraw during the applicable time lock period, which may be as few as twenty-four (24) hours' prior notice.

Any performance fees paid to Gauntlet from a Drift vault cannot be reclaimed after the vault pays them. Gauntlet's only contractual obligations arising under this protocol are those that we have to Drift. ***We have no contractual obligation to you, any vault user, or any other third-party arising from providing vault services.***

You further acknowledge and agree that our interests as a separate entity may at times conflict with our interests as a vault service provider. In such cases, we will not be required to give priority to anyone else’s best interests. Your only rights and remedies as a vault user will be those included in [Drift's Terms of \[Use\]](https://docs.drift.trade/legal-and-regulations/terms-of-use).

Further, understand that some vault strategies may involve the use of leverage. The leveraged nature of such strategies can produce substantial volatility and even significant losses if market prices move in an unfavorable direction. You participate in such strategies at your own risk, and neither Gauntlet nor Drift can offer any guarantees against risk of loss. Only highly sophisticated and risk-tolerant vault users should participate in such strategies.

While we exert our best efforts to select strategies and markets that we think will optimize vault performance; we do not guarantee the accuracy or reliability of our modeling and analysis, and in no event does our modeling and analysis reliably predict or guarantee expected performance or yield. It further does not provide assurance against risk of loss. Make your own risk-reward decisions based on your own sophisticated market perspectives. Finally, remember that you bear full responsibility for lawful possession, custody, and security of your digital assets when you transact with Drift vaults. In short, we set parameters and identify market strategies. The rest is up to you.

That being said, as a result of using Gauntlet’s Vault; you agree to release Gauntlet, its officers, directors, employees, and affiliates (“Gauntlet Parties”) from any claims or causes of action resulting from your use of the vault; including, but not limited to, any financial losses, data breaches, or inaccuracies in information or reporting used by the vault services. Said more plainly; if you use this vault service, your legal recourse is very limited, and you give up any claims that you may have against any Gauntlet Parties, to the fullest extent possible under applicable law.

<https://www.gauntlet.xyz/drift-vault-disclaimer>


# FAQs

## General Platform Questions <a href="#general-platform-questions" id="general-platform-questions"></a>

**Why use Drift for hedging?**

Several key reasons:

1. Avoid reflexive risk from hedging JLP on Jupiter itself
2. Better funding rates compared to Jupiter's fixed borrow rate
3. Ready-made vault infrastructure and SDK
4. Sufficient liquidity for current strategy size
5. Cross-margin capabilities are more capital efficient

***

## **How are fees calculated?**

For vaults that charge performance fees:

* Fees are taken on profits, not total value
* Charged by account during supply and withdrawals or quarterly across all accounts
* High water mark prevents double-charging
* Fees remain invested until withdrawal

For vaults that charge management fees:

* Fees are taken on the total value of the account, pro rated for the time the position is held in the vault
* Charged on all accounts anytime anyone supplies, withdraws or quarterly (3 business days prior to quarter end)
* Fees remain invested until withdrawal

***

### **What is the high watermark and how is it calculated?**

The high water mark is used to calculate the profits of your position upon which performance fees are charged. Fees on USDC denominated vaults are charged anytime an address either withdraws or supplies, as well as monthly 3 business days before the end of the month. Since users may not withdraw their full position in a given month, the high water mark tracks the highest amount of profits upon which fees have been charged, so that a user is not double charged for gains in multiple months.

The high water mark is calculated as gross of fees.

$$
HWM = (Highest Profit \_{when.fees.claimed} + Cummulative Net Deposits)
$$

Note: Although the current balance on the Drift FE is quoted net of fees, that is only hypothetical, denoting what you would be charged if you were to withdraw your entire account today. If market valuations change and your account balance decreases, the hypothetical fees owed also decrease with it.

***

### **Why might the vault performance be positive on a given day while my personal position shows a negative return?**

This is because returns are snapshotted daily, but TVL varies intraday as new users join or leave the vault.

As an example, suppose you were the sole user with $1M. In the morning, hJLP experiences a 1% loss, so your position is 990K. At noon, someone else supplies 990K, so that you now have a 50% stake in the vault. In the afternoon, hJLP experiences a 1% gain, so the vault value is 1,999,800, of which your stake is worth 999,900. At the end of the day, you lost $100, but the vault gained (1,999,800 - 1,000,000 - 990,000 = $9800). As you can see, the divergence between the daily snapshotted vault performance and personal performance is just caused by the randomness of returns sequencing and the timing of supplies and withdrawals to the vault.

***

### **What happens during platform issues?**

Different scenarios have different impacts:

* Jupiter issues affect JLP value and trading
* Drift issues affect hedge positions
* Smart contract risks exist for both. We maintain contingency plans for various scenarios, but users should understand platform risks.

***

## Basis Strategies <a href="#basis-strategies" id="basis-strategies"></a>

**How does the SOL Basis strategy work?**

The SOL Basis strategy combines two yield sources in a single vault. It uses SOL LST (Liquid Staking Token) as the spot asset to earn:

1. Staking rewards from the LST
2. Perpetual funding rates from derivatives The strategy can use up to 2x leverage when market conditions create favorable spreads between borrowing costs and funding rates.

***

**Why use dSOL as the spot asset?**

We chose dSOL due to:

* Deep liquidity for efficient trading
* Reliable staking rewards
* Strong market integration However, the strategy can optimize across different SOL LSTs based on market conditions and opportunities.

***

**How does the BTC Basis strategy differ?**

The BTC Basis strategy:

* Uses cbBTC as the spot asset
* Focuses purely on perpetual funding rates
* Doesn't include staking yield
* Can employ up to 2x leverage when spreads are attractive
* Dynamically scales positions based on vault balance and market conditions

***

## Gauntlet Basis Alpha (GBA) <a href="#gauntlet-basis-alpha-gba" id="gauntlet-basis-alpha-gba"></a>

**What is GBA?**

GBA is a portfolio strategy that deploys capital across multiple delta-neutral strategies:

* hJLP allocations
* SOL basis trades
* BTC basis trades
* Other basis trades

The strategy automatically balances these positions based on market conditions.

***

**How does GBA manage allocations?**

Initially, the strategy will employ funds based on static/manual weights. In the future iterations, the strategy will consider:

* Current funding rates across markets
* Available liquidity
* Trading volumes
* Historical performance patterns
* Risk metrics and limits

***

**Why choose GBA over individual strategies?**

GBA offers:

* Diversified yield sources
* Optimized risk-adjusted returns
* Less hands-on management needed

***

## Beta + GBA Overlay Strategies <a href="#beta--gba-overlay-strategies" id="beta--gba-overlay-strategies"></a>

**What are Overlay strategies?**

These strategies let you earn yield while maintaining market exposure:

1. Supply your SOL or BTC
2. Use it as collateral to borrow USDC
3. Deploy borrowed USDC into GBA This creates dual return streams: possible price appreciation plus basis yields.

***

**How do Overlay strategies manage risk?**

Risk management includes:

* Careful collateral ratio monitoring
* Dynamic leverage adjustment
* Liquidation risk management
* Market exposure tracking
* Continuous position rebalancing

***

**What's the difference between SOL and BTC Overlay?**

Both strategies follow the same principle but differ in:

* Underlying asset characteristics
* Collateral ratios
* Borrowing costs
* Market liquidity considerations
* Risk parameters

***

## Hedged JLP (USDC) Vault <a href="#hedged-jlp-usdc-vault" id="hedged-jlp-usdc-vault"></a>

**What is the USDC vault strategy?**

The USDC vault lets you supply USDC to get delta-neutral exposure to Jupiter's liquidity provision. When you supply, the vault converts your USDC to JLP, creating matching hedge positions on Drift. You earn returns from Jupiter's trading fees and Drift's funding rates while being protected against price movements in the underlying assets.

***

**How are returns generated?**

Returns come from multiple sources:

1. Jupiter trading fees (from perpetual market activity)
2. Funding rates from Drift hedge positions
3. Liquidation fees when traders get liquidated
4. Borrow fees from traders

The strategy doesn't rely on asset price appreciation, making it effective in both up and down markets.

***

**What happens during withdrawals?**

The vault has a 3-day withdrawal period. During this time:

* Your position is marked for withdrawal and will no longer accrue yield
* The strategy gradually unwinds positions using TWAP
* If the share value declines during this period, the withdrawal amount will be reduced proportionately
* If liquidity is low, we may borrow USDC against JLP
* You receive USDC back, minus any applicable fees

***

**Why do I see initial negative performance?**

Initial negative performance usually comes from entry costs:

1. Slippage when converting USDC to JLP
2. Trading fees for opening hedge positions
3. JLP premium/discount fluctuations These costs typically recover within 5 days through fee generation.

***

## In-Kind JLP Vault <a href="#in-kind-jlp-vault" id="in-kind-jlp-vault"></a>

**How does the in-kind vault differ from the USDC vault?**

The in-kind vault accepts direct JLP supplies, saving on conversion costs and slippage. This makes it ideal for:

* Existing JLP holders wanting price protection
* Users who can source JLP efficiently
* Those wanting to maintain JLP position while hedging. The vault creates hedge positions but returns JLP rather than USDC on withdrawal.

***

**What risks does the in-kind vault hedge?**

The vault hedges:

* Price movements in SOL, ETH, and BTC
* Delta exposure through continuous rebalancing
* Market volatility through position sizing

It doesn't hedge:

* Impermanent loss from pool rebalances
* JLP premium/discount fluctuations
* Smart contract risks

***

**Can I supply when JLP hits its TVL/supply cap?**

Yes, the in-kind vault remains open even when JLP reaches its TVL/supply cap. Since you're supplying JLP directly, you avoid the premium that typically appears when the cap is hit. This is a key advantage over the USDC vault, which might restrict supply during cap periods.

***

**How does withdrawal work for in-kind?**

You receive JLP tokens when withdrawing. The number of tokens might differ from your supply due to:

* Hedge position PnL
* Accumulated fees and returns
* JLP price changes relative to underlying assets. However, the USD value should remain relatively stable due to hedging.

***

## 2x Leveraged JLP Vault <a href="#id-2x-leveraged-jlp-vault" id="id-2x-leveraged-jlp-vault"></a>

**How does the 2x strategy work?**

The 2x strategy amplifies returns by:

1. Accepting user supply
2. Borrowing additional funds to double exposure
3. Converting total capital to JLP
4. Creating proportionally larger hedges. This provides double exposure to JLP yields while maintaining delta neutrality.

***

**What are the additional risks of 2x?**

Beyond standard vault risks, 2x strategy faces:

* Higher liquidation risk during volatility
* Borrowing costs that impact returns
* Larger impact from JLP premium changes
* More sensitive to market liquidity

***

**How do returns compare to regular JLP?**

The 2x strategy can outperform unhedged JLP in:

* Down markets (hedges provide protection)
* High funding rate environments
* Periods when leveraged yield exceeds price moves However, borrowing costs and larger hedging expenses can reduce returns.

***

**What happens if markets become very volatile?**

The strategy has multiple approaches for mitigating high volatility:

* Automated deleveraging triggers
* Dynamic collateral management
* Emergency shutdown mechanisms
* Increased rebalancing frequency


# Helpful Links

## Helpful Links & Contact Information <a href="#helpful-links-and-contact-information" id="helpful-links-and-contact-information"></a>

Social & Community

* [Telegram Announcements](https://t.me/+48PdcHYNL75mZWM5)
* Twitter: [@gauntlet\_xyz](https://x.com/gauntlet_xyz)
* Telegram contact: [@riskringer](https://t.me/riskringer)

## Support <a href="#support" id="support"></a>

* Email: <perpetuals@gauntlet.xyz>

## Documentation & Resources <a href="#documentation-and-resources" id="documentation-and-resources"></a>

* [Gauntlet hJLP Whitepaper](https://www.gauntlet.xyz/resources/hedged-jlp-whitepaper)
* [Jupiter Documentation](https://docs.jup.ag/)
* [Drift Protocol Documentation](https://docs.drift.trade/)
* [Gauntlet App](https://app.gauntlet.xyz/)

## Get Started <a href="#get-started" id="get-started"></a>

Visit [app.drift.trade/vaults](https://app.drift.trade/vaults) to start using our vaults

For additional support or questions, join our Telegram channel or reach out via email. Our team typically responds within 24 hours during business days.

[<br>](https://gauntlet-1.gitbook.io/gauntlet-drift-vaults-docs/resources/faqs)


# Levered RWA Strategy

Gauntlet's Levered Real-World Asset (RWA) Strategy represents a breakthrough in bridging TradFi and DeFi, enabling RWA holders to access enhanced yields previously unattainable in traditional formats.

This sophisticated approach combines Gauntlet's proprietary yield optimization engine with permissionless DeFi infrastructure to create a compelling yield enhancement while maintaining appropriate risk parameters.

<figure><img src="/files/wlKZalwpSRG6QhjFlzI3" alt=""><figcaption></figcaption></figure>


# Strategy Mechanics

**Asset Supply**: Users supply their RWA tokens into a Gauntlet-curated vault, which executes the yield optimization strategy within our sophisticated risk management framework.

**Collateralization**: The vault deposits the RWA tokens as collateral on a leading lending protocol and borrows stablecoins against this collateral.

**Strategic Leverage**: The borrowed stablecoins are used to purchase additional RWA tokens, which are again deposited as collateral.

**Dynamic Optimization**: This loop remains active subject to risk levels established by our quantitative yield optimization engine, which continuously monitors yield and borrow rates across DeFi markets.

**Automated Risk Management**: Our engine dynamically adjusts leverage ratios and collateralization levels based on market conditions, removing the need for manual position management.


# Yield Optimization Engine

As the leading model provider and vault curator in DeFi, we bring several critical advantages to this strategy:

* **Extensive Track Record**: Since 2018, our team has built and refined optimization strategies for tokens, protocols, and chains, developing sophisticated risk models that have been tested across multiple market cycles.
* **Data-Driven Approach**: We employ rigorous backtesting to establish strategy viability and continually refine parameters.
* **DeFi (and TradFi) Market Expertise**: Our deep understanding of both onchain lending mechanisms and traditional markets enables the development of innovative yield enhancement solutions.
* **Real-Time Monitoring**: To optimize performance, we track key metrics including:
  * Supply and borrow APYs
  * Liquidation Loan-to-Value ratios (LLTVs)
  * Leverage ratios
  * Overall market health


# Benefits and Market Applications

### Benefits

The Levered RWA Strategy offers several advantages for tokenized real-world asset holders:

**Enhanced Yields**: Access to improved returns compared to holding the RWA outright.

**Sophisticated Risk Management**: Benefit from institutional-grade risk parameters that help protect against market volatility.

**Self-Custody**: Users maintain custody of their assets throughout the process.

**Automation**: The strategy eliminates the need for manual position management or complex DeFi interactions.

**Scalability**: The approach can be deployed across multiple chains and integrated with various DeFi protocols to optimize for the best risk-adjusted returns.

### Market Applications

The Levered RWA Strategy is particularly well-suited for:

* Tokenized credit funds
* Tokenized fixed income products
* Other yield-bearing RWAs with stable underlying value

By enabling these real-world assets to interact with DeFi's permissionless infrastructure, our Levered RWA Strategy helps realize the promise of bringing traditional finance onchain while enhancing returns for RWA holders.


# Strategy in Action

## **Levered sACRED on Polygon**

In collaboration with Securitize, Morpho, and Polygon, we launched a levered real-world asset (RWA) strategy, using sACRED on Polygon PoS, the tokenized version of an Apollo-managed multi-asset credit fund.

This collaboration bridges TradFi and DeFi by driving the utility of RWAs onchain, offering enhanced yields currently unavailable in TradFi formats. This sophisticated solution enables permissioned sACRED holders to access enhanced yields using our yield optimization engine and permissionless DeFi infrastructure powered by Morpho and Polygon while maintaining appropriate risk parameters.

The first iteration of the strategy is run on Compound Blue (powered by Morpho) on Polygon PoS.

<figure><img src="/files/fWB2Gxo2UB6YkQ5ehfml" alt=""><figcaption></figcaption></figure>

## **Levered** FalconX CV token **on Ethereum**

In partnership with FalconX, Pareto, M11, and Morpho, we launched a levered RWA strategy using FalconX CV tokens on Ethereum.

The strategy uses FalconX CV tokens as collateral to borrow USDC and purchase more CV tokens within calibrated risk parameters set by Gauntlet’s optimization engine. This collaboration further bridges TradFi and DeFi, showcasing how onchain RWAs can operate as composable building blocks for institutional portfolios to achieve greater capital efficiency.

The result is a programmable, model-driven strategy to scale exposure and amplify risk-adjusted returns.

**How the strategy works**

1. FalconX CV tokens are supplied to a [Gauntlet curated vault](http://app.gauntlet.xyz/vaults/gpaafalconx).
2. The vault deposits CV tokens as collateral on Morpho and borrows USDC against them.
3. The borrowed USDC is used to buy additional CV tokens, which are again deposited as collateral on Morpho.
4. The loop remains active within the risk levels established by Gauntlet’s optimization engine, which monitors supply & borrow APYs, sets appropriate LLTVs, optimizes the leverage factors, and continually assesses market health.

<figure><img src="/files/R1MWhWO9b3pzqD9Zl6G1" alt=""><figcaption></figcaption></figure>


# Resources

[Levered sACRED Press Release](https://securitize.io/learn/press/securitize-and-gauntlet-launch-levered-rwa-strategy-on-apollo-diversified-credit-securitize-fund)

[Gauntlet Levered sACRED Strategy Blog](https://www.gauntlet.xyz/resources/enhancing-rwa-returns-with-gauntlets-optimization-engine)

[Levered sACRED Strategy Aera Vault](https://app.aera.finance/vaults/polygon:0xb1095567c713744e61f1f949e1d324adac738c6a)

[Coindesk: Levered sACRED Strategy](https://www.coindesk.com/markets/2025/04/30/tokenized-apollo-credit-fund-makes-defi-debut-with-levered-yield-strategy-by-securitize-gauntlet)

[Gauntlet Levered FalconX Strategy Blog](https://www.gauntlet.xyz/resources/falconx-levered-rwa-strategy-with-pareto)

### Videos and Panels

{% embed url="<https://www.youtube.com/watch?v=KNqUgb2sCWc>" %}

{% embed url="<https://www.youtube.com/watch?v=0FsiR_qjtE0>" %}


# Market Volatility

How have Gauntlet vaults performed during extreme market events?

## **Liquidity Stress and Stream xUSD Insolvency (Oct. - Nov. 2025)**

<a href="https://docsend.com/view/zncm5y7pu593ktxp" class="button primary" data-icon="circle-right">Read our liquidity stress report</a>

**Summary**

From mid-October through early November, DeFi faced among its most significant solvency and liquidity shocks to date, including the largest liquidation event in its history and the subsequent Stream (xUSD) insolvency.

On November 4, 2025, Stream Finance disclosed a $93M loss tied to an external fund manager overseeing part of xUSD’s backing, prompting an immediate pause on redemptions and supplies. With redemptions frozen, xUSD holders could only exit via secondary markets, driving the price down to \~$0.94–$0.88 within hours. xUSD liquidity migrated to safer stablecoins and vaults with robust risk management.

The incident occurred weeks after the October 10 liquidation event, in an environment with lower trading liquidity, tighter risk appetite, and elevated sensitivity to any solvency headlines.

**Gauntlet Risk Management Actions**

Following the market volatility on October 10, Gauntlet’s curation team proactively assessed\
potential latent risks across all vault exposures. Anticipating the possibility of undisclosed\
insolvencies, we conducted a comprehensive review of all assets that could have been\
affected under a worst-case contagion scenario and strategically exited markets that exhibited\
elevated counterparty or asset-backing risk.

As news of xUSD losses came to light, we reviewed our collateral universe to exit any directly affected markets. The primary assets that had solvency concerns were deUSD, sdeUSD, and mHYPER. We already had zero exposure to these assets in all of our vaults.

**Result**

Gauntlet vaults did not accrue any insolvent debt.

Gauntlet’s USDC Vaults demonstrated strong relative resilience compared to peer vaults. USDC Balanced TVL increased by 35%. Frontier declined by 20%, while other curated Morpho Vaults experienced TVL drawdowns exceeding 60%.

<figure><img src="/files/QKkiGHDLlsv81qGRo5cb" alt=""><figcaption></figcaption></figure>

***

## **ByBit Exploit (February 2025)**

**Summary**

On Feb 21, 2025, ByBit was hacked for 500K ETH due to an exploit on SAFE’s multisig frontend.

The primary risk to Morpho vaults was through Ethena token exposure, given that ByBit is one of the CEXs where Ethena takes short perpetual positions. ETH exposure was not a concern.

**Gauntlet Risk Management Actions**

Proactively reallocated $28.9M from potentially affected markets: $16.7M from PT-sUSDE/USDC markets in the Gauntlet USDC Balanced vault and $12.2M from PT-USDe and PT-sUSDE markets in the Gauntlet DAI Balanced vault out of an abundance of caution.

Acted preemptively despite Ethena Labs reducing its PnL exposure from an initial <$30M to $0 and confirming that none of its stablecoin's backing assets were custodied on Bybit.

Confirmed that ongoing Safe frontend issues had no impact on our vault operations. Implemented an internal multisig transaction checking tool to verify transaction hashes independently, eliminating reliance on the Safe frontend which displayed incorrect transaction hashes during the exploit.

[Read more.](https://x.com/gauntlet_xyz/status/1893029338368614776)

**Result**

Gauntlet vaults did not accrue any insolvent debt.

***

## **Usual Money Redemption Mechanism Adjustment Event (January 2025)**

**Summary**

Usual Money offers two stablecoins: USD0, a tokenized Treasury bill-backed stablecoin, and USD0++, a liquid staked version of USD0 with a four-year lock-up. Originally, Usual Money offered a 1:1 instant redemption from USD0++ to USD0, which allowed users to bypass the four-year lockup.

On Jan 9, 2025, Usual Money [announced](https://usual.money/blog/usual-s-next-leap-solidifying-a-4-year-horizon-for-sustainable-growth) they were updating their terms on the USD0++ to USD0 redemption window to a 0.87 price floor and an early unstaking mechanism that would be released in the following days.

USD0 and USD0++-related Morpho markets were only allocated in the Gauntlet USDC Balanced vault given that the assets and underlying protocol smart contracts were not yet battle-tested.

**Gauntlet risk management actions**

Within 5 minutes of Usual's updated terms announcement, which triggered the eventual depeg of USD0++ from its 1:1 with USDC and other stablecoins, our team was wargaming likely outcomes and responses. Gauntlet was the first to release a full quantitative assessment of the situation and outline our actions to protect our vault suppliers.

Between 9:46pm on 2025-01-09 and 4:02am on 2025-01-10, we executed a series of nine transactions that withdrew all funds from the affected markets, eliminating all of our exposure to USD0++-related assets.

[Read more](https://x.com/gauntlet_xyz/status/1877825680756613372).

**Result**

Gauntlet vaults did not accrue any insolvent debt.

***

## **ezETH Market Volatility (April 2024)**

**Summary**

On April 24, 2024, ezETH experienced a liquidity crunch with a market price drop starting at 2024-24-04 02:25 UTC.

Only the highest risk ezETH/WETH/0.86 LLTV market accrued insolvencies (10.96 WETH), with 7.12 WETH (11 basis points of yield) socialized to the Gauntlet LRT Balanced vault. The lower LLTV markets (0.77 and 0.625) experienced no losses. LRT Balanced suppliers in the vault for more than two days were net positive in their supply position given accrued interest.

**Gauntlet risk management actions**

Prior to this event, our risk-balanced allocation strategy distributed WETH across three LLTV tiers: 5k WETH in the highest yield 0.86 LLTV market, 2k WETH in the 0.77 market, and 400 WETH in the 0.625 market. This tiered approach contained potential losses while maintaining exposure to higher yields.

**Result**

The Gauntlet LRT Balanced vault (now Gauntlet WETH Balanced), designed to capture higher-risk yield opportunities for users with a greater risk appetite, delivered an annualized yield of \~27% in the weeks preceding the event. As shown in the conversion chart, this substantial yield significantly outpaced the 11 basis point socialized loss during the volatility event.

<figure><img src="/files/K9OUbMHUngObFYR0XZGC" alt=""><figcaption></figcaption></figure>


# Integrations & Partnerships

Our existing institutional partnerships and integrations.

We integrate Gauntlet Vaults and partner with several exchanges, custodians, wallets, and financial apps worldwide. On this page, we outline some of our largest partnerships and integrations.

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We partner with leading institutions worldwide to integrate Gauntlet vaults, delivering institutional-grade yields directly to their users.

<a href="https://form.typeform.com/to/Dg1csGfV?utm_source=vaultbook&#x26;utm_medium=homepage&#x26;utm_campaign=sql" class="button primary" data-icon="circle-right">Get in Touch</a>
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<h4 align="center"><a href="#fintechs">Fintechs</a> | <a href="#custodians">Custodians</a> | <a href="#exchanges">Exchanges</a> | <a href="#wallets">Wallets</a></h4>

## Fintechs

### Wirex Business

<figure><img src="/files/NMYE0N2tZ3NjMHx6bPgS" alt=""><figcaption></figcaption></figure>

**Vault integration:** Gauntlet USDC Prime on Base

**Description:** Wirex [integrated Gauntlet-curated vaults](https://www.gauntlet.xyz/resources/gauntlet-brings-sustainable-defi-yield-to-wirex-business-accounts) into its business accounts, enabling an industry-first experience where businesses can earn sustainable, institutional-grade stablecoin yield with a single click. USD and EUR balances held in Wirex Business accounts are seamlessly converted to USDC and deposited into Gauntlet’s USDC Prime vault on Morpho’s Base deployment. The non-custodial structure allows users to retain full control of their assets while earning yield until the moment they spend, with no lockups and immediate liquidity.

**Gauntlet's work:** Gauntlet curates and manages the USDC Prime strategy powering Wirex’s yield product, providing ongoing risk assessment, strategy calibration, and liquidity oversight to ensure Wirex’s requirements for security, transparency, and sustainable yield are consistently met. Prime vaults allocate to high-liquidity, blue-chip lending markets, primarily those backed by ETH- and BTC-denominated collateral, and are supported by Gauntlet’s 24/7 utilization monitoring, stress-testing, and dynamic parameter optimization.

***

### **KAST**

<figure><img src="/files/xBVFuyW9LeK4BVuKtCSW" alt="" width="563"><figcaption></figcaption></figure>

**Vault integration:** Gauntlet USD Alpha on Aera

**Description:** KAST chose Gauntlet USD Alpha, our flagship stablecoin yield vault built on Aera, [to power its new KAST Earn product](https://www.gauntlet.xyz/resources/gauntlet-usd-alpha-kast-earn-stablecoin-yield-to-500k-users). Gauntlet USD Alpha balances capital preservation with sustainable yield for millions of KAST users worldwide. KAST Earn is part of a robust product suite that includes the KAST stablecoin credit card and local fiat on- and off-ramp integrations

**Gauntlet's work:** Gauntlet curates and manages the gtUSDa strategy, powering KAST Earn, providing ongoing risk assessment, strategy calibration, and liquidity oversight to ensure KAST's requirements for security, transparency, and sustainable yield are met. The strategy taps into select variable and fixed yield opportunities on protocols like Morpho and Pendle across Ethereum mainnet and L2s like Base, Optimism, and Arbitrum. Users pay no gas fees when the strategy rebalances and protocol rewards are autoredeemed and compounded back into the strategy, no manual claims required.

### SCRYPT Swiss

<figure><img src="/files/gBK9dDExAMHpgEjYGytF" alt=""><figcaption></figcaption></figure>

**Vault integrations:** Various Gauntlet Vaults

**Description:** SCRYPT, licensed as a Portfolio Manager under FINMA, [partners with Gauntlet](https://www.gauntlet.xyz/resources/scrypt-partners-with-gauntlet-to-unlock-swiss-licensed-defi-for-institutions) to offer regulated, risk-managed DeFi vault strategies to professional and institutional investors across Europe. Gauntlet's onchain vault strategies are made available through SCRYPT's Swiss-regulated portfolio management structure, bridging the gap between traditional finance standards and DeFi innovation.

**Gauntlet's work:** Gauntlet develops, deploys, and oversees the vault strategies offered through SCRYPT, applying its quantitative risk models and 24/7 monitoring to ensure strategies consistently meet the performance and safety requirements of SCRYPT's institutional client base, including banks, funds, and asset managers.

***

### **Swissborg**

<figure><img src="/files/KwsYOu9fJXjxa0iV0vjv" alt=""><figcaption></figcaption></figure>

**Vault integrations:** Custom SwissBorg Vault on Morpho

**Description:** Gauntlet partners with [SwissBorg](https://swissborg.com/), one of Europe’s leading fintech platforms for crypto, to offer curated Morpho vaults through SwissBorg’s Earn program. This engagement involves custom vault selection and dynamic risk management to align with SwissBorg’s internal risk frameworks, operational standards, and evolving regulatory expectations, including compliance with MiCA requirements in the EU.

**Gauntlet's work:** Gauntlet provides detailed reporting on vault performance, market conditions, and risk parameter adjustments to support SwissBorg’s enterprise compliance and audit processes. Technical integration includes customized monitoring and alerting to ensure uptime, responsiveness, and reliability consistent with SwissBorg’s platform requirements. Gauntlet maintains an ongoing feedback loop with SwissBorg’s risk, compliance, and operations teams to continually adapt vault curation and risk strategies as regulatory, market, or product needs evolve.

***

## Custodians

### Anchorage Digital

<figure><img src="/files/eL9Us00mzqynms1pbL0C" alt=""><figcaption></figcaption></figure>

**Vault integrations:** Gauntlet USDC Prime, USDT Frontier, USDT Prime, WETH Prime, WETH Balanced on Mainnet

**Description:** Anchorage Digital [integrated Gauntlet-curated vaults](https://x.com/gauntlet_xyz/status/2022007574871388522?s=20) into its platform via Anchorage's Morpho integration, unlocking DeFi yield for institutional clients. Anchorage users can access Gauntlet USDC, USDT, and WETH vaults directly through the platform, without leaving their custodial environment. The integration reflects a shared belief that security and trust, the core of every custodial relationship, should extend seamlessly into DeFi access.

**Gauntlet's work:** Gauntlet curates and manages the USDC, USDT, and WETH vault strategies available through Anchorage, providing continuous risk monitoring and dynamic parameter optimization to ensure performance and security align with the standards Anchorage's institutional custody clients expect.

***

## Exchanges

### **Binance and OKX**

<figure><img src="/files/beoWMlOPIHDgoP0z6qy5" alt=""><figcaption></figcaption></figure>

**Vault integrations:** Various stablecoin vaults

**Description:** Morpho collaborates with [Binance](https://binance.com) to offer Gauntlet-curated vaults through respective Earn programs for their users. This collaboration enables their users to access Morpho’s onchain lending opportunities directly via their platforms, with Gauntlet providing risk-optimized vault curation.

**Gauntlet's work:** As part of this collaboration, Gauntlet selects and manages the vaults based on dynamic market conditions, targeting a balance between yield generation and risk mitigation. This provides a streamlined way for Binance and OKX users to access yield without leaving their respective ecosystems, while leveraging Gauntlet’s expertise in risk management and protocol optimization.

***

### **Coinbase cbBTC Lending Market**

<figure><img src="/files/TtJf7TIAtVmnzFOm76eS" alt=""><figcaption></figcaption></figure>

**Description:** Gauntlet collaborates with [Coinbase](https://coinbase.com) to support the launch and ongoing risk management of cbBTC lending markets on Morpho, enabling Coinbase users to borrow USDC against their Bitcoin holdings without selling their assets. In this integration, users’ Bitcoin is converted into Coinbase Wrapped Bitcoin (cbBTC) on a 1:1 basis, which is then supplied as collateral to Morpho’s smart contracts operating on Coinbase’s Base L2 network.

To support Coinbase’s mission to go to market with a novel asset, Coinbase required an onchain partner to ensure that the asset launch was structured properly for DeFi users and venues. The collaboration aims to offer a secure and transparent borrowing experience, integrating DeFi with Coinbase’s retail exchange.

**Gauntlet work:** Gauntlet provides continuous risk modeling and optimization for these markets, ensuring that lending parameters align with Coinbase’s for capital efficiency and market stability. This includes dynamic adjustments to liquidity allocations, supply caps, and liquidation thresholds based on real-time market conditions. By leveraging Gauntlet’s expertise in protocol optimization and risk management, the cbBTC lending markets are designed to meet the compliance and operational requirements required by Coinbase.

***

### Bitpanda

<figure><img src="/files/6VYaVWphpKcz6TapWd0u" alt="" width="563"><figcaption></figcaption></figure>

**Vault integrations:** Gauntlet USDT, USDC, EURC, and WETH vaults on Mainnet, and USDC, WETH, and LBTC Balanced vaults on Base

**Description:** Bitpanda integrated [seven Gauntlet vaults into its DeFi Wallet](https://x.com/gauntlet_xyz/status/1957801777895723486), providing users with simplified access to risk-adjusted DeFi yields across Ethereum and Base while retaining control of their funds. Bitpanda DeFi Wallet users can add supply to Gauntlet-curated USDT, USDC, EURC, and WETH Balanced vaults on Mainnet and USDC, WETH, and LBTC Balanced vaults on Base.

**Gauntlet's work:** As part of this partnership, Gauntlet selects and curates the vaults using battle-tested models informed by market conditions to target a balance between yield generation and risk mitigation. This provides a streamlined way for Bitpanda DeFi Wallet users to access yield without leaving the app, while leveraging Gauntlet’s expertise in risk management and yield optimization.

***

### **Gemini**

<figure><img src="/files/vyRMc19nqKIWkGj7r8jY" alt=""><figcaption></figcaption></figure>

**Vault integrations:** Gauntlet USDC Balanced and USDC Prime on Arbitrum.

**Description:** [Gemini](https://onchain.gemini.com/invest) integrated Gauntlet-curated vaults [into its new Onchain Hub](https://www.gauntlet.xyz/resources/geminis-onchain-hub-integrates-with-gauntlet-vaults), giving Gemini users streamlined, non-custodial access to DeFi yield. At launch, [users can supply USDC into Gauntlet USDC Balanced and Gauntlet USDC Prime on Morpho](https://x.com/gauntlet_xyz/status/1955984615363260926) (Arbitrum). These strategies are surfaced directly in Gemini’s interface and governed by Gauntlet’s quantitative risk framework.

**Gauntlet's work:** Gauntlet selects and manages the integrated USDC Balanced and Prime vaults using battle-tested models and continuous risk monitoring to target the best risk-aware opportunities while preserving user control of funds (users can withdraw anytime).

***

### **Coinbase Verified Pools**

<figure><img src="/files/iZwSIgYSV7V21sxO2Cdq" alt=""><figcaption></figcaption></figure>

**Description:** [Coinbase selected Gauntlet as their quantitative optimization](https://www.coinbase.com/blog/the-future-of-onchain-Liquidity-is-here-via-coinbase-verified-pools) partner to support the launch of Verified Pools, a KYC-verified, non-custodial liquidity solution built on Coinbase’s Base L2 and Uniswap v4. This collaboration facilitates a secure and transparent trading environment for both retail and institutional users, integrating identity verification with DeFi protocols.

**Gauntlet's work:** Gauntlet provides active risk modeling and optimization services to ensure pool configurations meet institutional standards for capital efficiency and market health. This includes pre-launch research and mechanism guidance to inform the product launch, dynamic adjustments to liquidity parameters, and ongoing monitoring to align with Coinbase’s compliance and operational requirements. Coinbase receives active reporting, custom use case analysis, and live tooling built specifically for goals associated with Verified Pools.

[Gauntlet announcement post](https://x.com/gauntlet_xyz/status/1902725980122161208)

***

## Wallets

### Phantom

<figure><img src="/files/zs9k3PPECKeZc7aVckJZ" alt=""><figcaption></figcaption></figure>

**Description:** Gauntlet serves [as the exclusive curator for CASH](https://kamino.com/lend/cash-earn), a fiat-backed, USD-pegged stablecoin designed by Phantom and issued by Bridge through Stripe's Open Issuance platform. Starting with the CASH Earn vault on Kamino, users can supply CASH via several interfaces to earn yield on Phantom’s stablecoin.

**Gauntlet’s work:** Gauntlet selects the markets that CASH is allocated to in this vault. We manage liquidity allocation across these markets and ensure we are 1) protecting user funds at all times and 2) optimizing for the best risk-adjusted APY. In addition to curation, we also work with Phantom on writing and adjusting interest rate curves to ensure healthy utilization as the program scales.

***

### Trust Wallet

<figure><img src="/files/WoRxUUvwJzJUaGd2VPOg" alt=""><figcaption></figcaption></figure>

**Vault integrations:** Gauntlet USDC Frontier on Mainnet and USDC Balanced on Base.

**Description:** We collaborate with Trust Wallet to provide their users with access to Gauntlet-curated Morpho vaults through an Earn program. This collaboration enables their users to access Morpho’s onchain lending opportunities directly via the Trust Wallet platform as their flagship Earn Program for USDC, with Gauntlet providing risk-optimized vault curation.

**Gauntlet's work:** As part of this collaboration, Gauntlet selects and curates the vaults using battle-tested models informed by market conditions to target a balance between yield generation and risk mitigation. This provides a streamlined way for Trust Wallet users to access yield without leaving the app, while leveraging Gauntlet’s expertise in risk management and yield optimization.

***

### Utila

<figure><img src="/files/gO3oq4pwRj6rLbxaft1p" alt=""><figcaption></figcaption></figure>

**Description:** Utila partnered with Gauntlet, Optimism, Morpho, and [Yield.xyz](http://yield.xyz) to launch an institutional stablecoin yield solution offering direct vault access via their enterprise MPC wallet platform. Their institutional customers can now earn yield on USDC holdings via Utila’s solution, maintaining their traditional standards around security and compliance.

**Gauntlet's work:** Gauntlet curates the yield strategy, sets parameters, and monitors performance. We work closely with Utila and its partners to ensure that their requirements are consistently met and upheld.

## Additional Collaborations

In addition to the case studies shared, Gauntlet actively collaborates with or has collaborated with companies such as **Circle, Securitize,** [**Moody’s Analytics**](https://www.moodys.com/web/en/us/insights/credit-risk/block-by-block-assessing-risk-in-decentralized-finance.html)**, S\&P Global,** [**Bitwise Asset Management**](https://bitwiseinvestments.com/event/assessing-risk-in-decentralized-finance-a-conversation-with-gauntlet-and-bitwise)**,** and others.


# Frequently Asked Questions

If you are thinking about integrating vaults into your product offering, here are some answers to common questions we get from partners. You can also [get in touch with us to chat about integrating with our risk-optimized vaults](https://form.typeform.com/to/wL0KbKAT?utm_source=vaultbook\&utm_medium=FAQs).

<table data-card-size="large" data-view="cards"><thead><tr><th></th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td>Integrations &#x26; Partnerships</td><td><a href="/pages/dNZ6p5XEU9tMocrEnq3B">/pages/dNZ6p5XEU9tMocrEnq3B</a></td></tr><tr><td>Market Volatility</td><td><a href="/pages/tWOt8XIJpUpON7qxlqux">/pages/tWOt8XIJpUpON7qxlqux</a></td></tr><tr><td>Vault Integrations</td><td><a href="/pages/shyoCzQyy4Oz5gYiAlhY">/pages/shyoCzQyy4Oz5gYiAlhY</a></td></tr><tr><td>Oracles</td><td><a href="/pages/PEf6Hi5aqoXXIKrOlYdm">/pages/PEf6Hi5aqoXXIKrOlYdm</a></td></tr><tr><td>25% Move in BTC or ETH</td><td><a href="/pages/poqEyBaD5cJiXlA0dxkM">/pages/poqEyBaD5cJiXlA0dxkM</a></td></tr><tr><td>Gas Costs</td><td><a href="/pages/YqTNXMfqkBmia39nmHjY">/pages/YqTNXMfqkBmia39nmHjY</a></td></tr></tbody></table>

<br>


# Vault Integrations

How to integrate Gauntlet-curated vaults with an Earn program.

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We partner with leading institutions worldwide to integrate Gauntlet vaults, delivering institutional-grade yields directly to their users.

<a href="https://form.typeform.com/to/Dg1csGfV?utm_source=vaultbook&#x26;utm_medium=homepage&#x26;utm_campaign=sql" class="button primary" data-icon="circle-right">Get in Touch</a>
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<figure><picture><source srcset="/files/YaCJ8j99qr1RhMFW24av" media="(prefers-color-scheme: dark)"><img src="/files/UuL0wN8fl7gsZB2H3oJe" alt=""></picture><figcaption></figcaption></figure>
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Gauntlet provides white-glove integration onboarding to create vaults, markets, test supply flows, and general quality assurance. Morpho also provides the following integration documentation: <https://docs.morpho.org/earn/getting-started>, and has an internal integration team that helps partners integrate Earn programs.

In practice, a partner would integrate with Gauntlet-curated Morpho Vaults by connecting their embedded wallet infrastructure to Morpho’s onchain smart contracts. Integration involves enabling users to interact with the following core contract functions:

* **Supply**: Users supply supported assets (e.g., USDC, ETH) directly from their self-custody wallets into selected Gauntlet-curated vaults.
* **Withdraw**: Users can redeem their vault positions and withdraw assets from their self-custody wallet.
* **Claim Rewards**: Users can claim any incentives or rewards associated with their vault participation.

Partners implement Morpho’s standard smart contract interfaces and can optionally leverage Morpho’s APIs and SDKs for enhanced user experience, analytics, and position tracking. Partners do not need to custody user assets — all interactions are direct between the user’s wallet and the Morpho smart contracts, preserving user ownership at all times.


# Oracles

Why do we use hard-coded oracles when the borrowable asset is USDC?

For markets where the borrowable asset is USDC, we configure the USDC price at 1 USD within the quote function of the oracle, ensuring it remains constant regardless of market fluctuations. This mechanism is particularly useful in the following stablecoin depeg scenarios:

* Upward depeg: If USDC trades above $1, fixing the oracle price at $1 prevents borrowers from being prematurely liquidated due to a temporary price spike.
* Downward depeg: If USDC trades below $1, fixing the price prevents users from borrowing excess USDC at a discount, which would otherwise increase systemic risk.

With a market-rate oracle, users who borrow a depegged USDC below $1 may later face liquidations once the token regains its peg, as the nominal value of their debt increases. This can also introduce potential insolvency risk if the rebound is sharp and liquidity is thin.

During depeg events, our automated risk-off system proactively deallocates from USDC-based markets to minimize exposure and halts further borrowing until the asset stabilizes around parity.


# 25% Move in BTC or ETH

What’s the impact of extreme market moves on Gauntlet Vaults?

For BTC and ETH markets allocated to Gauntlet vaults, borrow positions are overcollateralized with an 86% Liquidation Loan To Value (LLTV). If borrow positions become unhealthy during extreme volatility, they are typically liquidated by external participants known as liquidators. [Read more about liquidators and liquidations here](https://vaultbook.gauntlet.xyz/vaults/morpho-vaults/vault-curation-considerations-a-deeper-dive/liquidations-and-liquidators).

LLTV parameters preserve a \~10% collateral buffer to absorb slippage and market volatility. Our vault allocation engine continuously simulates liquidation outcomes across different price and liquidity environments and dynamically reduces exposure when drawdown conditions exceed predefined risk tolerance thresholds.


# Gas Costs

Who pays the gas costs associated with vault actions?

Transaction execution is handled by the allocation address unique to each vault, and suppliers do not incur transaction costs. Risk-off actions are not impacted by higher gas costs.


# Glossary

Last updated: December 11, 2025

## **A**

#### **Allocated Markets**

For lending vaults, allocated markets comprise the set of underlying DeFi lending markets that a vault supplies into. The vault’s APY is a function of the APYs borrowers pay in those markets, plus any relevant incentives, net of performance fees.

#### **APY (Annual Percentage Yield)**

The annualized return that suppliers receive on their assets supplied to a vault. Vault APYs change dynamically over time and are measured as a percentage.

## B

#### **Balanced Vaults (Competitive Yield Strategies)**

Vaults that target higher yields than Prime while still keeping insolvency risk low, by allocating to a blend of blue-chip and some smaller-cap collateral markets. ([Learn more](/vaults/morpho-vaults/balanced-vaults-competitive-yield-strategies))

## **C**

#### **Curator**

The entity that designs, configures, and oversees a vault. On lending protocols, curators select markets to which the vault allocates supply, set caps, adjust allocations, and maintain risk management and performance over time. Curators can also curate vaults on perpetual futures protocols and implement delta-neutral trading strategies.

## **E**

#### **Ecosystem Vaults**

Vaults deployed in partnership with DeFi protocols that integrate Gauntlet-curated vaults into their own user experience. These may be Prime, Balanced, or Frontier in risk profile. ([Learn more](/vaults/morpho-vaults/ecosystem-vaults))

## F

#### **Frontier Vaults (Maximum Yield Strategies)**

Vaults that seek the highest yields by allocating to riskier collateral markets, which can have higher insolvency risk and volatility. ([Learn more](/vaults/morpho-vaults/frontier-vaults-maximum-yield-strategies))

## H

#### Health Factor

Health factor is an indication of a user’s borrow position health, calculated as (Collateral Value / Loan Value) × LLTV. A high health factor indicates a healthy position, while a health factor below 1 indicates a position eligible for liquidation. ([Learn more](/vaults/morpho-vaults/vault-curation-considerations-a-deeper-dive/liquidations-and-liquidators))

## **I**

#### **Incentives**

Vault suppliers may receive incentives based on their vault positions. Markets and Vaults can include incentives in the form of rewards and points added to incentivize supply. ([Learn more](/vaults/morpho-vaults/incentives-and-performance-fees))

#### **Insolvency Risk**

Risk of experiencing under-collateralized debt (i.e., the collateral value is less than the debt value). Insolvency impacts lenders, who may lose a portion of their supplied assets if an under-collateralized borrower fails to repay their debt and is not liquidated. ([Learn more](/vaults/morpho-vaults/vault-curation-considerations-a-deeper-dive/risk-exposure))

#### **Interest Rate Model (IRM)**

The interest a borrower pays on a loan is defined by the market’s interest rate model (IRM). Each market is launched with a specific and immutable IRM. [Morpho implements an AdaptiveCurveIRM](https://docs.morpho.org/learn/concepts/irm/), which is designed to maintain a market’s utilization at around 90%. When utilization falls below 90% the borrow rate will gradually decrease, and if utilization surpasses 90% the borrow rate will increase.

## L

#### Liquidation

Liquidation is the process of forcibly closing a loan position by repaying a borrower's debt and claiming their collateral. A borrow position that has crossed the allowed LLTV in the market is eligible for liquidation. ([Learn more](/vaults/morpho-vaults/vault-curation-considerations-a-deeper-dive/liquidations-and-liquidators))

#### Liquidation Loan-to-Value (LLTV)

Liquidation Loan-to-Value (LLTV) is the threshold at which a borrower's collateralized position in a DeFi lending protocol becomes eligible for liquidation. Different protocols may use other terminology, including “liquidation threshold” or “liquidation ratio.” ([Learn more](/vaults/morpho-vaults/vault-curation-considerations-a-deeper-dive/liquidations-and-liquidators))

#### **Liquidity**

Liquidity refers to the availability of assets that can be readily bought, sold, or exchanged without significantly impacting their price. Higher liquidity is crucial for liquidators to liquidate positions profitably.

#### **Loan-to-Value (LTV)**

A percentage metric that measures the size of a loan relative to the value of the collateral securing it, calculated as (Loan Amount / Collateral Value) × 100. In DeFi lending protocols, LTV serves as the primary indicator of a borrowing position's health and risk level. A position with $8,000 borrowed against $10,000 in collateral has an LTV of 80%.

## **M**

#### **Market Caps**

Curators can set limits on how much of a vault’s supply can be allocated to a specific market. Caps are used to prevent over-concentration and to bound risk exposure per market.

#### **Market Parameters**

The fixed characteristics of each market: collateral asset, loan asset, liquidation loan-to-value (LLTV), interest rate model (IRM), and oracle. These are immutable once the market is created.

#### **Morpho**

A leading DeFi lending protocol that provides a trustless lending/borrowing layer and an abstracted vault layer (Morpho Vaults), where Gauntlet deploys and curates vaults. ([Learn more](https://docs.morpho.org/get-started/))

#### **Morpho Vaults**

Non-custodial vaults that allocate supplier capital across Morpho lending markets. Curators oversee various vault actions, including market allocations, market caps, due diligence, liquidity monitoring, and overall risk management. ([Learn more](/vaults/morpho-vaults))

## N

#### Non-Custodial

A non-custodial application is one where users retain direct control of their assets. Users hold their own private keys and interact with smart contracts directly from their wallets. In non-custodial applications, no intermediary ever takes possession of user funds. This is in contrast to custodial services (like centralized exchanges), where a third party holds assets on behalf of users.

## **O**

#### **Oracles**

Oracles are price feeds used to determine the value of collateral and loan assets. Oracle prices are the exact prices used in the formula for calculating LTV. The largest oracle providers include Chainlink, Redstone, and Pyth. ([Learn more](/resources/frequently-asked-questions/oracles))

## **P**

#### **Performance Fees**

Performance fees are calculated as a percentage of the interest a user has earned in the vault. The Performance fee is charged on Native APY only and not on any yield derived from rewards or points. ([Learn more](/vaults/morpho-vaults/incentives-and-performance-fees))

#### **Prime Vaults (Conservative Yield Strategies)**

Vaults that target risk-adjusted yield from *very low* insolvency-risk strategies, allocating to blue-chip, highly liquid collateral markets. ([Learn more](/vaults/morpho-vaults/prime-vaults-conservative-yield-strategies))

## **S**

#### **Supplier**

A user who supplies assets to a vault. Suppliers gain exposure to the vault’s strategy and risk profile while delegating day-to-day actions (allocations, due diligence, rebalancing, hedging) to a vault curator. Vault suppliers maintain control of their assets and can withdraw at any time due to the non-custodial nature of DeFi vaults.

#### **Supply Asset**

The specific token a user supplies into a vault (e.g., USDC, ETH). It’s the foundation of a given vault and determines what strategy and risk you’re getting.

## **T**

#### **TVL (Total Value Locked)**

The total dollar value of assets supplied across one or more vaults.

## U

#### Utilization

Utilization is the amount of a specific market’s supply that has been loaned to borrowers. If a market has $1M in supply and $900K has been borrowed, the utilization rate 90%. ([Learn more](/vaults/morpho-vaults/vault-curation-considerations-a-deeper-dive/market-utilization))

## **V**

#### **Vault**

A non-custodial smart contract that runs a yield strategy. A vault allocates supplied assets into underlying DeFi protocols (e.g., [Morpho](/vaults/morpho-vaults), [Kamino](/vaults/kamino-vaults), [Aera](https://app.gauntlet.xyz/vaults/gtusda)) following a defined strategy and risk tolerance.

## Y

#### Yield

Yield refers to the percentage or total dollar return on an asset or position. While related, it is a more general and flexible term to define performance than APY.


# Content & Careers

<table data-view="cards"><thead><tr><th></th><th data-hidden data-card-cover data-type="files"></th><th data-hidden data-type="content-ref"></th><th data-hidden data-card-target data-type="content-ref"></th></tr></thead><tbody><tr><td>Careers</td><td><a href="/files/H2w7pvO8wmEia7Y0TltZ">/files/H2w7pvO8wmEia7Y0TltZ</a></td><td><a href="https://www.gauntlet.xyz/careers">https://www.gauntlet.xyz/careers</a></td><td><a href="https://www.gauntlet.xyz/careers">https://www.gauntlet.xyz/careers</a></td></tr><tr><td>Content and Research</td><td><a href="/files/Z8ICG42afQpB61QGFPZM">/files/Z8ICG42afQpB61QGFPZM</a></td><td><a href="https://www.gauntlet.xyz/resources">https://www.gauntlet.xyz/resources</a></td><td><a href="https://www.gauntlet.xyz/resources">https://www.gauntlet.xyz/resources</a></td></tr><tr><td>DeFi Dashboards</td><td><a href="/files/Znd6SW7CkmNL2cKvxZF0">/files/Znd6SW7CkmNL2cKvxZF0</a></td><td><a href="https://dashboards.gauntlet.xyz/">https://dashboards.gauntlet.xyz/</a></td><td><a href="https://dashboards.gauntlet.xyz/">https://dashboards.gauntlet.xyz/</a></td></tr><tr><td>About Us</td><td><a href="/files/xXde894fQ8vQ7VdNb45w">/files/xXde894fQ8vQ7VdNb45w</a></td><td><a href="https://www.gauntlet.xyz/about">https://www.gauntlet.xyz/about</a></td><td><a href="https://www.gauntlet.xyz/about">https://www.gauntlet.xyz/about</a></td></tr><tr><td>Our Team</td><td><a href="/files/KcDR1Bl913P44g7Co7eU">/files/KcDR1Bl913P44g7Co7eU</a></td><td><a href="https://www.gauntlet.xyz/our-team">https://www.gauntlet.xyz/our-team</a></td><td><a href="https://www.gauntlet.xyz/our-team">https://www.gauntlet.xyz/our-team</a></td></tr><tr><td>Brand Kit</td><td><a href="/files/GU3zS24rBqGwMCvu2uLy">/files/GU3zS24rBqGwMCvu2uLy</a></td><td><a href="https://www.gauntlet.xyz/brand-kit">https://www.gauntlet.xyz/brand-kit</a></td><td><a href="https://www.gauntlet.xyz/brand-kit">https://www.gauntlet.xyz/brand-kit</a></td></tr></tbody></table>


# Disclosures

On this page, you can find important Gauntlet policies and disclaimers. Please read them carefully.

| Document                                                                                                              | Last Updated      |
| --------------------------------------------------------------------------------------------------------------------- | ----------------- |
| [Terms of Service](https://www.gauntlet.xyz/tos)                                                                      | November 8, 2023  |
| [Privacy Policy](https://www.gauntlet.xyz/privacy-policy)                                                             | July 18, 2023     |
| [Vault Disclaimer](https://storage.googleapis.com/gauntlet-public-web-assets/Gauntlet_New_Partnership_Disclaimer.pdf) | NA                |
| [Drift Vault Agreement & Disclaimer](https://www.gauntlet.xyz/drift-vault-disclaimer)                                 | December 11, 2024 |