morpho

'sup team!

I'd love to have some insights about the following case:
Right now on Morpho, net APY for the Gauntlet USDC Prime (less risk) and Core (more risk) respectively offer 20% and 12.5%. It seems counter intuitive given they use fairly similar assets (different allocation oc), and the one supposed to be more conservative display almost x2 the rate of the riskier one.

Could someone, maybe @kugusha.eth or @merlinegalite could walk me through a concrete case that could lead to that situation? Really curious to understand the mechanisms behind it. 🙏

/music co-host | Music DAO founder everwave.xyz | ex telco.in founder | writing on web3 & culture https://paragraph.xyz/@alixkun.eth

Great catch with this opportunity 🦋

Risk is defined by the markets that the vault is allocating its liquidity to. For Core vault it's only WBTC and wstETH atm. There's a very high demand on borrowing USDC with these two collateral assets which is the reason for 20% APY. 
If you check the Prime vault and its markets, there're also MRK, tBTC, pufETH, and a few more assets. The borrowing demand against these assets is lower atm. 

Lmk if that's helpful :)

good q from @alixkun about the APY difference on Morpho.

23% apy for lending USDC with the lowest risk possible, just saying 🫴🦋

/monad ecosystem growth | ex telco.in & everwave.xyz founder | /music moderator | writing on web3 & culture https://paragraph.xyz/@alixkun.eth

good q from @alixkun about the APY difference on Morpho.

23% apy for lending USDC with the lowest risk possible, just saying 🫴🦋
https://warpcast.com/kugusha.eth/0xef24d605

maxxing on /morpho 🦋 | pursuing a higher self w /higher-athletics | consistently curious

Why is it low risk?  Who is paying for this APY?  Borrowers?

risk = exposure to collateral assets. low risk = blue-chip collateral like wbtc, eth; medium risk would be some LST tokens for example

> who's paying
you're right. borrowers.

Startup artist seeking inspiration.  Champion of /bcard