Introducing Feather Vaults & Interface On Morpho

Vaults Feather
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Background

Feather is a Morpho only curator (~$15M AUM) and interface focused on safe and continuous underwriting for a variety of vaults we support. Today, Feather curates vaults across SEI, Kaia, and Celo, and we operate an interface (app.feather.zone) that helped replace the deprecated Morpho Lite app across multiple chains (Soneium, Lisk, Hemi, TAC, Celo, Kaia, and SEI) made possible via a Morpho grant.

Feather aims to externalize our internal asset level due diligence to the world as we build out what we call the “Morpho Intelligence Layer”. Our hypothesis: an immense amount of value can be created by building an active and accurate public commons of asset level due diligence that tracks the state of asset backing, exposure, opsec, and mechanics for all assets that exist in the Morpho ecosystem. The dashboards and bespoke due diligence data gathering that supplies our models with the data needed to safely underwrite assets in our vaults is the same data that will be open to the entire world to view.

Trust no one, verify everything.

This is at the heart of our desire to create a 3rd party platform that double checks the work done by asset issuers. In the process, this public commons will raise the bar for asset issuers, save time for all the different types of entities that are performing redundant due diligence at a less intensive level than Feather, and ultimately will help build trust in the work that Feather performs as an underwriter.

The Feather philosophy

Prior to building Feather on top of Morpho, the core team built the world’s first encrypted cross margin money market as well as one of the world’s first overcollateralized encrypted stablecoins. As a result of this half decade journey of building rust smart contracts from 2020 - 2025 in Cosmos, we internalized and increasingly respected the importance of (1) Isolated markets (2) Existing network effects (3) Underwriting (4) Security as key pillars of building a successful lending ecosystem. All of which led us to Morpho as the proper infrastructure for the next decade onwards to handle (1) (2) and (4).

That of course leaves the modular ecosystem of Morpho to work on (3 / curation) which includes us. Specifically, Feather underwrites risk, asset by asset, continuously. We believe that underwriting is an active relationship with a position and asset over time. All of our automated tooling, thresholds, procedures, are downstream of this obsession of trusting no one, and actively verifying everything.

If an asset issuer links us to a transparency dashboard, our first instinct is to build our own about your asset. If you link documentation about permissioning and opsec, we will go and query it and stress test your assumptions. If you don’t have a counter party exposure map or a concentration heat map, don’t worry, we’ll build that too.

All in the name of actively protecting our users while generating a risk adjusted return, one block at a time.

Core curation principles

Asset-level due diligence. Before any collateral enters a Feather market, it passes through a structured diligence process covering reserve composition and backing, pricing and oracle design, the liquidation path and on venue liquidity, redemption mechanics under stress, and legal and jurisdictional exposure. Our diligence checklists are repeatable, documented, and built to be defended to allocators. We support collateral types others might not, because we’ve done the work to know precisely what exposure we are holding.

Continuous underwriting, not point-in-time scoring. Listing an asset is the beginning of our work, not the end. Every market we curate is monitored against the assumptions we underwrote it on: backing, liquidity, peg behavior, redemption latency, etc.. When the facts change, our allocations change. A position underwritten in calm conditions and never revisited is exactly how depositors get hurt. We are constantly revisiting our exposure.

Multichain capability — proven, not promised. Feather already curates across SEI, Kaia, and Celo, and operates a Morpho access interfaces on seven chains.

The New Vault: Feather USDC Frontier

Feather is spinning up a USDC market on Ethereum that supports USDi as collateral, a first ever.

Vault asset: USDC
Collateral: USDi (to start)
Chain: Ethereum
Target APY: ~5%
Performance fee: 15%
Management fee: 0%

What USDi is

USDi is an inflation linked digital dollar designed to track the U.S. Consumer Price Index and preserve purchasing power over time. Unlike a conventional stablecoin that holds a flat $1.00 nominal peg, USDi’s reference value rises with measured inflation — using the same interpolated Reference-CPI mechanism that governs TIPS, indexed to a March 2025 baseline. It is, in effect, cash that doesn’t quietly lose value while it sits as collateral.

Three properties make it an unusually clean collateral asset:

  • Real-asset backing. USDi reserves sit in the USDi Coin Fund — an unlevered portfolio of U.S. Treasuries, inflation-linked bonds, FX, commodities futures and options, and cash, managed to track monthly CPI. Reported historical annualized volatility is just over 2%, with a multi-year correlation to monthly inflation in the 58–86% range.

  • No duration risk. Because a USDi coin effectively “matures” every day, it carries none of the interest-rate price risk that makes a long-dated TIPS swing on rate moves. For a lender, that removes an entire category of collateral volatility.

  • Independent verification. Fund NAV is struck at each mint and burn by an independent administrator (Trident Fund Services), with an annual audit by Cherry Bekaert. Custody, settlement, and liquidity run through established partners including BitGo, Circle, Chainlink, and Uniswap.

What We’re Underwriting

Feather’s diligence on USDi focused on the four places this asset could actually hurt a depositor:

  1. Pricing and oracle design. USDi is not a dollar-pegged asset — its value floats upward with the Reference CPI. A naive $1.00 oracle would systematically mismark the collateral. Our market is built to price USDi against its published inflation-adjusted reference value, so collateralization tracks the asset’s true worth rather than a stale nominal assumption using Chainlink as the oracle provider for this asset.

  2. Liquidation path and liquidity. We mapped the venues and depth available to unwind USDi into USDC under stress, and set conservative loan-to-value and liquidation parameters that reflect realizable on venue liquidity.

  3. Redemption mechanics. Mint and burn occur onchain for standard sizes, with large redemptions (>$1mm) routed through KYC’d partners. We took into account the latency and capacity of both paths and sized exposure accordingly.

  4. Reserve and counterparty risk. We reviewed the fund’s composition, its administrator and auditor, and the tracking error between USDi’s market behavior and realized CPI, the assumptions we monitor continuously.

Transparency

Morpho exposes every vault’s current allocation, role assignments, timelocks, and proposed changes through its interface. The full state of every Feather vault is observable, onchain, at any time. We curate on Morpho’s Vault V2 infrastructure, and we publish our underwriting rationale rather than asking depositors to take our parameters on faith.

We also will be launching our support for Ethereum via the Feather app by which depositors can also double check the listed parameters.

Timelocks

Timelocks for specific functions follow Morpho’s requirements. Critical changes (e.g. the addition of a new market) are delayed by at least 3 days before execution. Exact timelock specifications are visible on the Morpho UI alongside other technical specifics.

Resources