Note: I am aware that bundling multiple ARKs is frowned upon, but I believe this is an exception given that V1 versions of most of these ARKs already exist. However, I am willing to provide further prioritization in the comments, starting with the top 1-3 ARKs.
Summary
This RFC proposes two important actions for the USDC Higher Risk vault on Ethereum Mainnet:
- Raise allocation caps on existing ARKs that are currently capped at 0% or near-zero
- Onboard new competitive yield sources that reflect current market conditions
The USDC Higher Risk vault is experiencing outflows and stagnant growth because its composition more closely resembles a conservative vault than a risk on product. Users selecting “Higher Risk” expect exposure to the strategies that are actually winning in today’s market.
Motivation
The Problem: Outflows and Stagnant Growth
The USDC Higher Risk vault is bleeding capital. This Dune dashboard shows concerning outflow trends. This is a product-market fit issue specific to how this vault has been configured recently with respect to risk caps.
Root Cause #1: Overly conservative allocation caps
Current vault composition:
| Strategy | Live APY | Allocated | Allocation Cap |
|---|---|---|---|
| FluidFToken USDC | 5.97% | 1.95M | 60.47% |
| Syrup USDC | 5.43% | 3.81M | 100.00% |
| Buffer | - | 1.00K | n/a |
| Euler Frontier Yala USDC | 71.58% | 0.00 | 0.00% |
| SiloManagedVault apostro USDC | 10.73% | 0.00 | 0.00% |
| Term Summer USDC | 9.41% | 0.00 | 0.00% |
| Euler Frontier MMEV USDC | 8.45% | 0.00 | 0.00% |
| Morpho USDC Clearstar Reactor | 7.07% | 0.00 | 0.00% |
| Morpho USDC Gauntlet Frontier | 6.96% | 0.00 | 0.00% |
| Morpho USDC MEV Capital | 6.88% | 0.00 | 0.00% |
| Morpho USDC Steakhouse InfiniFi | 6.89% | 0.00 | 0.00% |
The irony: Strategies yielding 7%+ APY are capped at 0%, while the vault concentrates 100% of capital into 5-6% APY strategies. At the monent, this makes it a “Higher Risk” vault in name only.
Root Cause #2: Yield sources don’t reflect market winners
The DeFi landscape has evolved slighlty, with new yield sources coming to the for, some even are delivering 10%+ APY. The Higher Risk vault should be capturing these opportunities.
The Ask
- Immediately raise caps on existing 0%-capped ARKs
- Onboard new ARKs from protocols that are currently outperforming
Specifications
Network: Ethereum Mainnet Target Vault: USDC Higher Risk
Part A: Raise caps on existing ARKs
These ARKs are already approved but capped at 0%. We propose raising caps to allow meaningful allocation:
| Strategy | Current Cap | Proposed Cap | Live APY |
|---|---|---|---|
| Morpho USDC Clearstar Reactor | 0.00% | 10% | 7.07% |
| Morpho USDC Gauntlet Frontier | 0.00% | 10% | 6.96% |
| Morpho USDC MEV Capital | 0.00% | 10% | 6.88% |
| Morpho USDC Steakhouse InfiniFi | 0.00% | 10% | 6.89% |
| Morpho USDC RE7 FX Protocol | 0.00% | 10% | 6.33% |
| (And others where relevant) |
Part B: Onboard new ARKs
| Asset | Vault Name | Contract Address | Link | Risk Level |
|---|---|---|---|---|
| USDC | CAP cUSD | 0xcCcc62962d17b8914c62D74FfB843d73B2a3cccC |
Link | Higher |
| USDC | Neutrl sNUSD | 0x08EFCC2F3e61185D0EA7F8830B3FEc9Bfa2EE313 |
Link | Higher |
| USDC | Lagoon Finance | 0x03d1ec0d01b659b89a87eabb56e4af5cb6e14bfc |
Link | Higher |
| USDC | Upshift USDC | 0xdA89af5bF2eb0B225d787aBfA9095610f2E79e7D |
Link | Higher |
| USDC | Upshift USDC | 0x998D7b14c123c1982404562b68edDB057b0477cB |
Link | Higher |
| USDC | Morpho Resolv USDC | 0x132E6C9C33A62D7727cd359b1f51e5B566E485Eb |
Link | Higher |
| USDC | Morpho MEV Capital USDC | 0xd63070114470f685b75B74D60EEc7c1113d33a3D |
Link | Higher |
| USDC | Midas mHYPER | 0x9b5528528656DBC094765E2abB79F293c21191B9 |
Link | Higher |
Individual Vault Specifications
CAP Protocol (stcUSD)
| Field | Value |
|---|---|
| Token | USDC → stcUSD |
| Network | Ethereum Mainnet |
| Contract Address | TBD |
| Risk Level | Higher |
| Est. APY | 8-15% |
| Strategy | Operator-managed yield with verifiable downside protection |
Overview: Yield generated via autonomous operators deploying into arbitrage, MEV, and RWAs. Aave base yield as minimum guarantee. Built on EigenLayer shared security.
Neutrl Protocol (sNUSD)
| Field | Value |
|---|---|
| Token | USDC → sNUSD |
| Network | Ethereum Mainnet |
| Contract Address | TBD |
| Risk Level | Higher |
| Est. APY | 16-30% |
| Strategy | OTC arbitrage (20%) + Delta-neutral (60%) + Liquid reserves (20%) |
Overview: Acquires discounted locked tokens from early investors, hedges with perps. First epoch: 16.58% APY vs 5.12% on sUSDe. $125M TVL. Backed by STIX.
Lagoon Finance Vault
| Field | Value |
|---|---|
| Token | USDC |
| Network | Ethereum Mainnet |
| Contract Address | 0x03d1ec0d01b659b89a87eabb56e4af5cb6e14bfc |
| Risk Level | Higher |
| Est. APY | 8-15% |
| Strategy | ERC-7540 curated vault |
Overview: Curators deploy across DEX LP, money markets, yield-bearing assets. $300M platform TVL. 7 security audits.
Upshift Finance USDC Vault #1
| Field | Value |
|---|---|
| Token | USDC |
| Network | Ethereum Mainnet |
| Contract Address | 0xdA89af5bF2eb0B225d787aBfA9095610f2E79e7D |
| Risk Level | Higher |
| Est. APY | 8-12% |
| Strategy | Institutional DeFi yield (KYC’d curators) |
Overview: ERC-4626 vaults managed by MEV Capital, Tulipa Capital, UltraYield. Lending against blue-chip and RWA collateral.
Upshift Finance USDC Vault #2
| Field | Value |
|---|---|
| Token | USDC |
| Network | Ethereum Mainnet |
| Contract Address | 0x998D7b14c123c1982404562b68edDB057b0477cB |
| Risk Level | Higher |
| Est. APY | 8-12% |
| Strategy | Institutional DeFi yield (KYC’d curators) |
Overview: Second Upshift vault with differentiated collateral exposure.
Morpho Resolv USDC Vault
| Field | Value |
|---|---|
| Token | USDC |
| Network | Ethereum Mainnet |
| Contract Address | 0x132E6C9C33A62D7727cd359b1f51e5B566E485Eb |
| Risk Level | Higher |
| Est. APY | 8-15% |
| Strategy | Curated lending against USR/wstUSR collateral |
Overview: ~32% allocation to Resolv’s ETH-collateralized USD stablecoin. High borrowing demand + rewards.
Morpho MEV Capital USDC Vault
| Field | Value |
|---|---|
| Token | USDC |
| Network | Ethereum Mainnet |
| Contract Address | 0xd63070114470f685b75B74D60EEc7c1113d33a3D |
| Risk Level | Higher |
| Est. APY | 8-15% |
| Strategy | Actively managed lending across Morpho markets |
Overview: MEV Capital is a top Morpho curator. Active rebalancing + MORPHO subsidies. Battle-tested strategies.
Midas mHYPER
| Field | Value |
|---|---|
| Token | USDC |
| Network | Ethereum Mainnet |
| Contract Address | TBD |
| Risk Level | Higher |
| Est. APY | 10-20% |
| Strategy | Multi-chain stablecoin yield (leveraged USDe, basis trading, Morpho LP) |
Overview: Liquid Yield Token managed by Hyperithm. $1.2B+ platform TVL. German-regulated, prospectus disclosed.
Informal Support Indicator
Should Lazy Summer DAO proceed with:
- Raising caps on existing 0%-capped ARKs in the USDC Higher Risk vault?
- Yes
- No
- Drafting SIPs to onboard the proposed new ARKs?
- Yes
- No