Summary
This proposal requests the whitelisting of the Etherealm USDC Vault as a curated vault on the Ethereum mainnet.
Curated by Etherealm Research, this vault employs a proprietary “Morpho Vault Manager” to automate risk constraints and yield optimization. The strategy focuses on a “Barbell Approach”: combining a robust base of transparent, over-collateralized assets with high-conviction “Alpha” allocations (e.g., PT tokens, RWAs), all protected by a real-time automated execution layer.
Curator Overview & Track Record
Etherealm Research is a specialized on-chain asset management team incubated by BitFi Labs. We bridge the gap between complex DeFi yield sources and passive USDC depositors through rigorous code-driven management.
See BitFi USD bfUSD multisig deposits to Etherealm USDC Vault: /debank.com/profile/0x7947931BA0c6531fb1180b5F825e3C9dF538cbb1
Performance (2025 YTD):
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USDC Strategy: +10% Net APY (outperforming standard lending benchmarks).
Current yields: bfBTC 6.89% APY, bfUSD 6.82%–14.24% APY.- bfBTC Dune Dashboard: /dune.com/peratx/bitfi-bfbtc
- bfUSD Dune Dashboard: /dune.com/peratx/bitfi-bfusd
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Safety Record: 0 Bad Debt, minimal drawdowns with rapid recovery.
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AUM: The team has overseen significant capital across Bitcoin (TVL $400M+) & Stablecoin (TVL $20M+) strategies with zero security incidents.
Strategy: The “Barbell” Approach
Our allocation logic is designed to outperform the “On-chain Fed Rate” (e.g., Sky sUSDS ~4.25%) while maintaining liquidity.
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Robust Base (Liquidity & Safety):
- Allocations to highly liquid, transparent Morpho markets like wstETH/USDC and cbBTC/USDC.
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Alpha Generation (Yield Enhancement):
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Yield-Bearing Collateral: Markets backed by reUSD, mHYPER, and Resolv RLP.
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RWA Integration: Exposure to mF-ONE for uncorrelated real-world yields.
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Early Liquidity Provision: Participating in early-stage markets to deepen liquidity for Morpho borrowers while capturing attractive yields and incentive premiums for LPs.
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Transparency Rule: We strictly refuse opaque “Black Box” assets. If an asset’s underlying collateral cannot be verified on-chain or lacks a reputable third-party audit (e.g., unverified re-hypothecated wrappers), it is blacklisted immediately.
Technical Architecture: Code-Driven Management
Unlike manual curators, Etherealm operates a custom-built Morpho Vault Manager that runs a continuous fetch -> risk -> optimize -> execute loop.
System Components:
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Risk Adapter: A distinct logic layer that enforces strict constraints before any reallocation. It calculates caps based on liquidity depth and utilization.
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Optimizer: Uses discrete dynamic programming (Global/Greedy mode) to find the optimal allocation that maximizes APY within the Risk Adapter’s constraints.
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Automated Runner: Monitors the vault 24/7. If a market violates safety parameters, the system triggers an immediate downgrade or exit without human intervention.
Risk Management & Crisis Response
Our risk framework is defined by specific, hard-coded parameters in our RiskAdapter:
1. Quantitative Constraints
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Utilization Hard Exit: If a market’s utilization reaches critically high levels, the system forces a rigorous exit to prevent liquidity lock-up.
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Target Utilization: We rebalance to maintain utilization within optimal ranges to ensure withdrawability.
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Liquidity Coverage: We require market liquidity to cover at least 80% of our position size; otherwise, the supply cap is automatically tightened.
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Drift Tolerance: Automated checks prevent allocation drift from exceeding safe limits due to interest accrual.
2. Crisis Management Case Studies (Proven Resilience)
Our “Transparency First” and “Rapid Response” philosophy has protected LP capital where others failed:
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The xUSD/deUSD Event: While other curators (e.g., MEV Capital, Relend) suffered significant bad debt due to exposure to opaque assets like xUSD/deUSD, Etherealm blacklisted deUSD early due to lack of transparency.
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mHYPER Incident: During the xUSD contagion, our monitoring systems identified the risk immediately. We executed a “front-run” exit, fully withdrawing capital before the liquidity crunch hit, while others were trapped.
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mMEV Avoidance: We detected a sudden drop in borrowing demand and solvency concerns, triggering an automated exit before the market collapsed.
Vault Specifications
Vault V1 (Current Production):
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Name: Morpho | Etherealm USDC Vault
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Asset: USDC
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Address:
0x7193794ec82f527Efb618Ac50C078D348eCBA4b6 -
Morpho App Link: /app.morpho.org/ethereum/vault/0x7193794ec82f527Efb618Ac50C078D348eCBA4b6/etherealm-usdc
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Management Fee: 0% (Current Phase)
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Performance Fee: 15% (On generated yield)
Vault V2 (Enhanced Infrastructure):
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Name: Morpho | Etherealm USDC V2
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Asset: USDC
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Address:
0xB7305D968ECD8a23a13eC01927E3f9588C7653B5 -
Morpho App Link: /app.morpho.org/ethereum/vault/0xB7305D968ECD8a23a13eC01927E3f9588C7653B5/etherealm-usdc
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Management Fee: 0% (Current Phase)
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Performance Fee: 0% (On generated yield)
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Key Improvements:
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Extended market coverage for broader diversification
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Enhanced rebalancing flexibility for optimal capital allocation
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Migration Path:
Currently, capital is primarily allocated to Vault V1. As we continue to refine our infrastructure, we will recommend LPs migrate to the V2 instance to benefit from enhanced market access and improved rebalancing capabilities. Migration guidance and notifications will be provided to depositors as appropriate.
Whitelisting Request
We request the Morpho DAO to whitelist those vault address
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V1 Vault: 0x7193794ec82f527Efb618Ac50C078D348eCBA4b6
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V2 Vault: 0xB7305D968ECD8a23a13eC01927E3f9588C7653B5
Whitelisting this vault brings a sophisticated, technically robust, and risk-proven allocator to the Morpho ecosystem, offering users a safe avenue for diversified real yield.
Resources
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Website: etherealm.one
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Documentation: /etherealm-research.gitbook.io
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X: /x.com/EtherealmOne
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Email: contact@etherealm.one