How Does the Risk-Off Vault Earn Yield?  

The Risk-Off Vault is a low risk USDC lending vault. It lends USDC to the Risk-On Vault which uses the USDC to short the ETH & BTC exposure in GLP. 

The Risk-Off Vault earns interest on the entire USDC position residing in Aave as collateral for the Risk-On Vault’s short position. So for every $1 the Risk-Off Vault lends to the Risk-On Vault, the Risk-Off Vault earns interest on a position of $2-3. This process is how the Risk-Off Vault earns leveraged yield on Aave.

To boost yield even further, the Risk-Off Vault also earns a fraction of ETH yield from GLP based on the Utilisation Ratio of the vault.

Utilisation Ratio = USDC Lent to Risk-On Vault / Risk-Off Vault TVL

Mechanism

Rage Trade

Overview

Operations

Risk-On Vault

Risk-Off Vault

Risk-On & Risk-Off Vault

Protocol Parameters

Smart Contracts

Audit Reports + Insurance

Delta Neutral Vault

ETH Perp

80-20 Vaults

Omnichain Liquidity

Trade Terminology 

Vaults Terminology 

Deposit + Withdraw

Open/Close Long Position

Open/Close Short Position

Earn Yield

Margining

PnL Math

Funding Rates

Oracles

Liquidation and Fees

Payoff

Protocols and Chains

80-20 Vault Analysis

Curve Tri-Crypto

Actions

Vault Parameters

Subgraph

Liquidation Bot

Price Arbitrage Bot

Audit Reports + Bounty

Recycled Liquidity + ETH Perp

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