Vault
Explore how the csUSDL Vault boosts your USDL earnings with automated lending, dual yields, and advanced risk management.
Last updated
Explore how the csUSDL Vault boosts your USDL earnings with automated lending, dual yields, and advanced risk management.
Last updated
The Coinshift USDL Vault combines the benefits of isolated lending markets and vaults, providing USDL holders with a secure and efficient way to earn yields through lending. Leveraging the Morpho protocol, the vault accepts single-asset USDL deposits and strategically allocates funds across Morpho markets according to risk parameters and optimization strategies defined by curator Steakhouse Financial.
csUSDL is an ERC-4626-compliant Liquid Lending Token (LLT) that represents a tokenized position of USDL within the Coinshift USDL Vault.
Simplified User Experience Deposit USDL into a single vault without needing to manage multiple lending positions.
Optimized Yield Steakhouse dynamically reallocates funds across lending markets as conditions shift, maximizing lender returns while keeping risks balanced.
Transparency and Security Vault logic is immutable and fully executed onchain, ensuring full transparency and robust security. See which collateral assets are used and have the power to veto the curator's choice.
Robust Risk Management Governance structures ensure comprehensive oversight and adaptable risk management
Conservative Choice Over-collateralized lending backed by blue-chip assets positions csUSDL as a conservative investment choice.
Liquidity Amplification csUSDL Vaults enhance liquidity through Morpho’s aggregated system, where multiple vaults share liquidity across markets. This setup ensures that when one vault supplies to a market, liquidity increases not just for that vault but for all connected vaults. As a result, lenders experience greater efficiency, and withdrawal capability compared to traditional isolated lending pools (read here)
Shared Liquidity csUSDL Vaults address liquidity fragmentation by pooling assets into a single lending market, offering greater liquidity compared to isolated markets. This ensures efficient asset availability for user withdrawals and borrowing, enhancing market stability and performance.
Morpho Markets The Coinshift USDL Vault is built on Morpho, a next-generation protocol that prioritizes capital efficiency, flexibility, and security. Morpho’s compact, immutable codebase reduces potential attck surfaces.
ERC-4626 Compliance The vault complies with the ERC-4626 standard, providing a standardized interface for yield-bearing tokenized vaults. This compliance ensures interoperability with other DeFi protocols and applications.
Tracking Here is the Morpho Vault address created by the Factory, being a smart contract deploying immutable onchain instances of Morpho Vaults: eth:0xc01Ba42d4Bd241892B813FA8bD4589EAA4C60672
Oracles For the oracles, the markets use Chainlink. It has been the main oracle provider of DeFi for the last 5 years and has been battle tested especially for the stETH/USD and WBTC/USD feed used.
Deposit Process
Users deposit USDL into the csUSDL Vault via the Coinshift Personal app, Morpho UI, or Etherscan.
In return, the vault mint csUSDL tokens representing their ownership share of the vault's assets.
Yield Generation
Dual Yield Streams:
Real-World Yield from USDL: Up to 5% yield backed by USDL’s real-world cash equivalents.
Additional Lending Yield: Deposited assets are dynamically allocated across Morpho markets. Extra interest generated from borrowers, who collateralize blue-chip assets such as WBTC and wstETH.
Exclusive Boosted Rewards: Earn additional rewards in MORPHO and SHIFT incentives.
Auto-Compounding: Accrued interest and rewards are automatically reinvested to enhance user returns.
Withdrawal Process
Users can redeem their csUSDL tokens for USDL at any time.
The withdrawal reflects the user's proportional ownership, including any accrued yield.
Vault Fee Structure
The csUSDL vault currently operates with no fees, making it completely free for users. In the future, a 5% fee on interest paid by borrowers may be implemented, deducted from lender proceeds. Users will be given ample notice through a time delay before any changes to the fee structure are applied.
Owner (Coinshift, Steakhouse Financal and Paxos International)
Composition: A 3-of-5 multisignature committee
Responsibilities: Sets high-level vault strategies and assigns roles.
Curator (Steakhouse Financial)
Role: Sets vault parameters such as adding or removing markets, reallocating capital, adjusting performance fees (as a percentage of borrower rates), and setting supply and borrow caps.
Function: Ensures the vault's activities align with risk and optimization strategies. However, actions like adding a market or increasing fees are subject to a time delay (1 to 14 days).
Allocator (Steakhouse Financial & Public Allocator Contract)
Role: Dynamically optimizes fund allocation within established parameters.
Function: Adjusts allocations to optimize yields while managing risk.
Guardian (Coinshift Security Council, later: DAO made up of vault depositors)
Role: Monitors and provides oversight, with the ability to veto actions within a specified timelock.
Function: Protects user interests by overseeing vault activities and intervening when necessary.
Security Feature: Timelocks introduce a waiting period before significant actions are executed in Morpho Vaults.
User Control: Steakhouse curates with a 7-day delay for changes, giving users time to review. Using Aragon DAO guardians, capital suppliers can vote to revoke curator actions. This setup keeps the vault non-custodial, ensuring users maintain control and can withdraw assets anytime.
Risk Management: Applies to changes that could increase vault risk (e.g., high LLTV markets, supply cap adjustments).
Transparency: Users can inspect timelock values in the "Read Contract" section of the vault for oversight.
Over time, Morpho has been audited 27 times by 12 different security firms. This covers Morpho Optimizers, Front-ends, Morpho Vaults and Morpho, and makes Morpho the most audited project in the world. .
Morpho Optimizers is renowned for achieving the highest score (98%) out of 300+ protocols on DeFiSafety, an independent rating agency that assesses how closely a protocol follows best practices.
A whole article was dedicated to the Morpho Security Framework here
The Coinshift USDL Vault is designed to provide an efficient, secure, and user-friendly way for USDL holders to maximize yields. With advanced risk management and transparent onchain operations, the vault offers a seamless experience for earning passive income through DeFi.
