K3 Capital Core Market on Unichain

Vaults K3 Capital
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Vault Rationale

The K3 Capital ETH Maxi MetaMorpho vault lends USDC against the most liquid volatile crypto assets on Unichain: WBTC, WETH, wstETH, weETH and UNI. The vault aims to deliver superior risk-adjusted yield to USDC lenders by accepting only the most liquid and battle-tested collaterals on the market to enable spot leverage trading for blue chip assets.

Vault information

Token Issuers

Wrapped Bitcoin (wBTC) is an ERC-20 token that brings Bitcoin liquidity to EVM and non-EVM networks. By tokenizing BTC, wBTC lets Bitcoin holders move beyond “store-of-value” status and take part in DeFi lending, trading, and yield strategies.

The product relies on three roles: custodians, merchants, and a multisig-managed smart contract. BitGo, the principal custodian, safeguards the BTC that backs every wBTC in circulation. Merchants — approved entities that pass KYC/KYB checks — handle minting and burning: they send BTC to BitGo; once confirmed, an equal amount of wBTC is issued at a strict 1:1 ratio. Burning works in reverse: wBTC is returned and the underlying BTC is released, keeping supply perfectly collateralized.

Because both the custodian addresses and the token contract are on-chain, anyone can instantly verify wBTC’s proof-of-reserves, and independent auditors periodically confirm that the BTC held matches the total wBTC supply.

wBTC is by far the largest and most traded BTC wrapper on the market:

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DeFiLlama bridged assets

Market parameters

wETH (Wrapped Ether) is the ERC-20 representation of native ETH. Locking ETH in a trustless wrapper contract mints wETH on a 1-for-1 basis; burning wETH releases an equal amount of ETH. The system is fully non-custodial and charges no minting or redemption fees. Because wETH behaves like a fixed-supply ERC-20 token, it integrates seamlessly with DEXs, lending protocols, and other DeFi applications that require ERC-20 compliance — while remaining pegged exactly to 1 ETH.

Market parameters

wstETH is the wrapped, non-rebasing ERC-20 version of Lido’s staked-ETH token (stETH). Each wstETH represents an ever-growing share of the underlying ETH validator pool: the token’s balance stays fixed, while its exchange rate versus stETH and ETH rises as staking rewards accrue. This fixed-supply behavior makes wstETH plug-and-play collateral across DeFi markets, lending pools, and cross-chain bridges — delivering the same staking yield with broader protocol compatibility.

Lido is the largest ETH staking provider, commanding 25.9% market share:

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Ethereum ETH Staking Dune Dashboard by hildobby

Market parameters

weETH is ether.fi’s wrapped, non-rebasing ERC-20 token. It locks a fixed token balance while its exchange rate versus eETH/ETH steadily rises to pass through (1) vanilla Ethereum staking rewards and (2) extra EigenLayer restaking yield and loyalty points. Similarly to wstETH, the design allows for clear weETH integrations with DeFi money markets, DEXs, bridges and L2s that can’t natively support rebasing tokens.

Ether.fi is by far the largest and most liquid LRT provider on the market. To date, the protocol controls 72.6% of the market:

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LRT War - Liquid Restaking Token Dune Dashboard by hashed_official

Market parameters

  • Collateral asset: weETH
  • Borrowable asset: USDC
  • Collateral supply limit: 5,000,000 USDC
  • Liquidation loan-to-value (LLTV): 86.0%
  • Oracle: Redstone market price oracle (aggregated spot price)
  • Interest rate model (IRM): Adaptive Curve IRM

UNI is Uniswap’s governance token. Minted in September 2020 with a 1 billion-token genesis supply and a 2 % annual inflation schedule that began in September 2024, it lets holders:

  • steer all Uniswap protocol upgrades and deployments, including control of the 430 million-UNI community treasury and the on-chain “fee-switch” that can levy trading fees;
  • vote on a March 2024 proposal that would share those fees with staked, delegated UNI once activated, turning the token into a potential cash-flow asset.

UNI currently carries no direct ownership claim on Uniswap Labs, and holders rely on governance decisions to unlock any revenue. Regulatory headwinds remain after the SEC sent Uniswap Labs a Wells notice in April 2024, underscoring legal uncertainty around the token. In practice, UNI’s value lies in coordinating and incentivizing the community that manages the largest on-chain exchange’s future—treasury allocations, protocol parameters, and cross-chain strategy.

Market parameters

  • Collateral asset: UNI
  • Borrowable asset: WETH
  • Collateral supply limit: 1,000,000 USDC
  • Liquidation loan-to-value (LLTV): 62.5%
  • Oracle: Redstone market price oracle (aggregated spot price)
  • Interest rate model (IRM): Adaptive Curve IRM

Fees

The performance fee for the vault is fixed at 10%.

About us

K3 Capital is an institutional DeFi liquidity provider and risk optimization firm focused on shaping the future of decentralized finance through rigorous fundamental-driven research and active market participation. Originating as an on-chain asset manager in 2021, K3 Capital is actively managing delta-neutral portfolios exceeding $570M, gaining unmatched insight into the mechanics of DeFi markets at scale.

Leveraging its institutional experience, industry relationships, and balance sheet, K3 Capital expanded into managing risk across a list of public markets and proprietary products — with an emphasis on stablecoin products and borrow/lend marketplaces.

Learn more about K3 Capital:

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