1. Summary
This proposal seeks to onboard a new yield strategy (ARK) to the USDC Lower Risk Vault on Arbitrum. This ARK allocates capital to a vault built on Morpho V2 infrastructure, which is currently offering materially higher yields compared to the strategies presently deployed within the USDC fleet.
The strategy predominantly routes USDC liquidity into markets utilizing wstETH, WBTC, and thBILL collateral, enabling the Lazy Summer Protocol to capture additional lending yield while maintaining exposure to high-liquidity, blue-chip DeFi primitives.
If approved, this ARK will expand the strategy set available to the USDC vault on Arbitrum, allowing capital to be dynamically routed toward these higher-yielding opportunities while maintaining diversification across strategies.
2. Motivation:
By integrating this ARK, the USDC vault can capture higher yields while maintaining exposure to well-established collateral assets. KPK has also established itself as one of the leading professional vault curators in DeFi, with a strong track record of managing onchain capital for major DAOs and institutional participants. Their expertise in market selection, risk parameter management, and automated rebalancing allows them to optimize yield opportunities while maintaining disciplined risk controls.
The KPK USDC Yield Ark has also shown an average yield of ~5% over the last 30 days, compared with the LR fleet’s current 30D yield of ~3.75%.
3. Specification
| Asset | Vault Name | Contract Address | Target Protocol | Risk Level |
|---|---|---|---|---|
| USDC | kpkUSDC Yield | 0x2C609d9CfC9dda2dB5C128B2a665D921ec53579d | Morpho V2 | Low/Medium |
4. Risk Assessment:
Lazy Summer Protocol currently has significant exposure to Morpho, and several V2 vaults have already been onboarded as ARKs; therefore, it is not expected to pose any new risk to the Lazy Summer Protocol, from both technical and economic perspectives.
The kpkUSDC Yield vault currently has collateral exposure to the following assets:
5. Next Steps
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Risk Review: Tagging @BlockAnalitica to provide a risk classification and suggest initial deposit caps for this ARK.
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DAO Signal: Gather feedback from @Recognized_Delegates
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SIP Promotion: Once risk parameters are defined, promote this to a formal SIP for on-chain execution.