Key Takeaways/Summary:

• Blueberry Vaults are now live with additional leverage and stablecoin strategies, empowering users to further customize their own DeFi strategies.

• The GLP 3x Leveraged Vault allows users to amplify rewards generation by leveraging GLP and amplifying the fees earned from on-chain trading activities, while the USDC Vault provides a sustainable and delta neutral reward generation opportunity for stablecoin holders.

• Key features of the Blueberry Vaults include: no deposit/withdrawal fees¹, no caps on pool or deposit size, rebalancing and optimization for efficient asset utilization, an integrated lending pool for enhanced user experience, and fair distribution of fees based on utilization.

Introducing the New Members of the Blueberry Vaults

We’re excited to continue contributing to the Arbitrum and GMX ecosystems with a new suite of vaults built for GLP and USDC, extending the Blueberry Vault offerings.

These new Blueberry Vaults, the GLP 3x Leveraged Vault and USDC Vault, introduce exciting features that let users take full control of their DeFi strategies and explore new avenues for growth.

1. GLP Non-Leveraged Vault (existing): Formerly known as the Base Compounder Vault, this vault automatically compounds your ETH rewards from GMX back into GLP, optimizing your overall rewards through the power of compound interest.

2. **GLP 3x Leveraged Vault (new!)**: This vault enables users to gain leveraged exposure to GLP and its rewards. It achieves this by borrowing USDC from the Stablecoin Vault and reinvesting it back into GLP.

3. **USDC Vault (new!)**: This vault lets users earn a delta-neutral reward on their USDC. It earns both a variable rate paid by the Leveraged GLP Vault and a portion of the rewards generated by the GLP minted from the borrowed USDC.

Below, we will do a focused dive into the two new vaults.

What Makes These Vaults Special?

Blueberry Vaults are built with the user in mind. There are no unnecessary deposit/withdrawal fees while providing two distinct DeFi strategies. This means users have a wider product shelf, i.e. tools, at their disposal. One vault focuses on supercharging existing GLP strategies, while the other vault embraces and offers a delta neutral strategy. The two different, yet complementary strategies, allow users to create more customized approaches to DeFi that fits his or her own profile and needs.

Let’s Dive Into How the Vaults Work 🏊‍♂️

GLP 3x Leveraged Vault: Supercharge your GLP position.

This vault is designed to enable GLP holders to leverage their assets within certain parameters, allowing for amplified fee generation. The vault provides users with leveraged exposure to GLP, which is a basket of approximately 50% stablecoins and other blue-chip assets such as ETH and BTC (WBTC). GLP also generates “real” rewards based on trading activity on the GMX platform. The vault results in leveraged exposure to the basket of assets making up GLP (similar to an index) and earns leveraged rewards generated by GLP.

Here’s how it works: The GLP vault borrows USDC from another Blueberry Vault, the USDC Vault, using GLP as collateral. The borrowed USDC is then converted into additional GLP, effectively creating leverage for GLP holders. GLP vault holders get the vast majority of all fees generated by the combined GLP pool and get leveraged exposure to the GLP index assets. In return, the GLP vault pays a variable APR to the USDC Vault based on utilization.

The leveraged vault targets 3x leverage, but can fluctuate above and below this target, ranging from no leverage to 4–5x leverage, before rebalancing activities take place. To learn more about the detailed mechanics, math, and processes behind this, you can read the “Risks” or “Economics” sections of the gitbook here.

What types of users would use this vault? Individuals who believe in the price increase of the index assets of GLP and/or believe the ETH rewards generated are worth more than the lending fees paid.

USDC Vault: Sustainable Fee Generation Opportunities for Stablecoin Holders

The USDC Vault plays a pivotal role in enabling leverage within the GLP 3x Leveraged Vault. It serves as the underlying provider of loaned assets that are utilized for leverage. It lends USDC to the GLP Leverage Pool, and in return, the GLP 3x Leveraged Vault pays a floating fee to the USDC pool based on utilization. Additionally, a small percentage of GLP rewards generated are allocated to the USDC Vault participants.

In this way, a USDC pool user earns both a stable lending rate based on utilization (similar to an AAVE lending pool) and also participates in a percentage of the upside of GLP rewards!

In cases where the GLP collateral falls below an acceptable threshold, the USDC will move to “rebalance” by automatically executing transactions that convert leveraged GLP back into USDC and back into the USDC Vault. The USDC Vault is a delta-neutral strategy, enjoying the benefits of fee generation from loaning to the GLP 3x Leveraged Vault and trading fee collection from GLP. The rebalance function allows for protection to USDC Vault users, in lieu of a hard liquidation mechanism.

To learn more about the math and mechanics behind the USDC Vault, review the “Risks” and “Economics” sections of the gitbook here.

Special Features of the Blueberry Vaults

• No Caps, Maximum Flexibility: Both the GLP 3x Leveraged Vault and the USDC Vault have no caps on pool size or deposit size, offering unlimited potential for the size of your position you put to work. However, it’s important to note that excessive GLP or USDC liquidity may affect leverage ratios and therefore fees generated. (For example, lower USDC liquidity results in a lower target leverage ratio.)

• Rebalancing and Optimization: To maintain optimal performance, the Blueberry Vaults operate within specific parameters and target leverage ratios. Rebalancing frequencies and bands are implemented to avoid unnecessary fees and ensure efficient utilization of assets.

• Integrated Lending Pool: The lending USDC Vault directly integrates with the GLP pool, allowing for a specialized feature set that benefits user experience. For example, this enables users to withdraw USDC even at full utilization (unlike traditional lending pools).

• Distribution of Rewards: Rewards are distributed based on a base floating rate for the borrowed amount, taking into account a utilization curve. This ensures fair rewards for USDC lenders and aligns with industry-standard decentralized borrowing protocols like AAVE and Compound, while still providing leverage-seekers an efficient rate for borrowing against their GLP and maximizing GLP fees that can be generated.

• No Hidden Fees: Neither the Vaults nor the front end take any fees from the user, unlike many other Vault systems. Transaction gas fees and GMX platform fees still exist. For example, when withdrawing from the USDC Vault does incur GMX-related platform redeem fees, which are passed on to the USDC user initiating the withdrawal.

Making the Most of Blueberry Vaults

We are committed to delivering an exceptional user experience. As we continue to improve and expand our front-end by supporting more ecosystems, projects and vaults, we will continue to identify opportunities to refine and add more features to enhance DeFi users’ journeys.

Note: When considering any of these vaults, we want to ensure that you are well-informed about associated risks, particularly around leverage. Please take a moment to read our dedicated post on the topic here.

Footnote 1: There are no fees charged by the Vaults or front-end directly, however gas transaction fees and GMX-platform related fees do exist, read either the “Key Features of the Blueberry Vaults”, the gitbook, or reference the GMX website for more details.

Seashell is on a mission to maximize user’s DeFi experiences through easy-to-use tools and front ends.

We believe in rewarding our community with many opportunities for supporting the ecosystem. Start your journey by minting an NFT or adding to the Blueberry Vaults today!

Stay updated on new features/products and be a part of our journey by joining Seashell’s Discord or following Seashell’s Twitter.