Wintermute Launches 'Armitage' USDC Vault Solution on Morpho

Crypto market maker Wintermute is expanding into the DeFi vault curation business built with a new product called Armitage.

What's the Scoop?

• Curation Era: Wintermute has unveiled Armitage, a new DeFi-focused vault curation business that has launched first on Morpho with two USDC-denominated vaults. According to a press release, the vaults will be actively managed, with the Armitage team "dynamically" allocating capital, setting risk parameters, selecting collateral assets, and rebalancing exposures in real time.
• Dual Vaults: The Wintermute USDC Prime vault will target 4-5% APY; currently accepts cbBTC, wstETH, and wBTC as collateral; and is intended for "depositors where capital preservation comes first." The Wintermute USDC Select vault will target 5-8% APY; currently accepts cbBTC, wstETH, wBTC, Sky staked USDS (stUSDS), and tokenized Wintermute debt (wmtUSDC) as collateral; and is intended for "depositors who want to go further on yield."
• Principal/Agent Concerns: Wintermute has borrowed nearly $110M through the Wildcat lending protocol, with lender positions represented by the wmtUSDC token. Armitage’s “USDC Select” vault now provides liquidity backed in part by that collateral structure, creating a potential alignment problem whereby the vault curator may adjust rates or portfolio allocations in a manner that supports demand for wmtUSDC at the detriment of depositors.