Failed to understand source of yield for Flagship ETH vaults

[sirgarfield]

Hi, I am new to morpho vaults.

I am considering making a deposit into the vault but I am unable to understand the source of the yield.

The vaults has nearly 10% APY. while majority of the deposit is lent to the wstETH/WETH market where borrower only pays 1% APY.

I looked at the vault page and it says deposit makde into wstETH/WETH market is generating 9.65% APY.

I failed to understand how this is possible without leveraging and looping.

Can someone explain where does the yield come from and do we employ leverage to generate these 10% APY ?

Thanks

[albist]

hello,
the Net APY you observe is most likely due to additional rewards distributed at market level or vault level.
best way to get a proper support and explanations is to join the Morpho discord server: https://discord.morpho.org/

There you will be able to share specifics (vault address for instance) and you will get the best support.

[sirgarfield]

morpho discord is the first place i tried. but this discord has got 1 single channel select-role and i am unable to to figure out how to proceed onto interacting with the community ?

any tips on that ?

[albist]

please react to this select role message to access the whole server

[Danegva]

Hello,

Since Morpho provides the protocol but the vaut is curated by BlocAnalytica and B.Protocol, I don’t think Morpho Discord is the best place to discuss the strategy right ?

I am also interested to hear more about the strategy followed and the small explanation on the vault itself is very poor : « The Flagship ETH Morpho vault curated by B.Protocol and Block Analitica is intended to optimize risk-adjusted interest earned from blue-chip LST and stablecoin collateral markets. The Flagship ETH vault also serves as a pre-deposit vault for Relend Network. Users who supply ETH will collect RELEND units and have the option to access Relend Network once live. »

Any clue how to get a better view on the strategy applied ?

Thanks

[albist]

My understanding of the initial user question was more that he was trying to understand how Morpho protocol and Morpho Vaults work in a general way (how a vault supplies to underlying markets, how rewards can impact the Net APY of a Vault, etc.) more than curators’ strategy.
This is why I thought the best was to invite him on the forum.

If you are interested to get a deeper understanding of curators’ strategy and get in touch with them directly, you are correct, I would say that the governance forum is one of the best way to do so.
In the Vaults section of the governance forum, you can access each curators section, and there find more info about their strategies.
You can write on an existing thread to ask them more or create one to ask more about their strategy.