Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.
Compound Selects Steakhouse for USDC Treasury Management
Steakhouse has been selected by Compound’s Treasury Management Committee to curate the DAO’s primary USDC allocation sleeve. The capital will sit in a dedicated noncustodial Ethereum vault built specifically for Compound, alongside its separate RWA sleeve.
The starting portfolio will be spread across Prime and High Yield lending, fixed-rate positions and a Turbo sleeve.
The strategy is expected to earn between 4.2% to 5.9% net APY, while keeping 35% of the capital recallable the same day and roughly 80% within a week. This leaves room to actively move capital while keeping most of the treasury relatively liquid as rates, opportunities and risk change.
The structure runs through our Steakhouse Box infrastructure, while Compound keeps custody through vault shares held in its Treasury Timelock.
Compound also holds guardian rights, with material changes going through a public timelock where either guardian can cancel them, and the Box has been audited by ChainSecurity and Cantina. Over time, the setup can expand into new tokenised assets and potential Compound v4 markets.
Steakhouse Kamino Vault Growth on Solana
We are expanding on Solana, with total TVL across our Kamino vaults growing from $31m on May 1 to over $62m today, roughly doubling over 3 and a half months.
The largest driver has been Steakhouse USDG High Yield, which grew from around $4m in July to $40m, making it our largest vault on Kamino.
Growth accelerated after Kamino and the Global Dollar Network launched a $300,000 three-month USDG incentive campaign on July 13, with more than $12m deposited into the vault in around one day and utilisation reaching 85%. The campaign adds USDG rewards on top of the underlying lending yield, as covered in our Markets Update when it launched.
The Steakhouse USDG HY APY has remained relatively stable and high over the past month, ranging between 7.5% and 8.5%.
Term Finance Exploit and its Impact on Morpho
On August 23, Term Finance lost around $8.5m after malicious governance proposals gained control over its Meta Vaults. The attacker drained roughly 1.68m USDC from five Term-managed USDC vaults and 2,842 WETH from Term’s ETH Meta Vault, which had part of its funds allocated through the Parity Core ETH vault on Morpho.
Around $6.8m was withdrawn from the Parity Core ETH vault during the exploit. Since that capital was spread across Morpho lending markets, we examine whether the withdrawal had any noticeable effect on them.
There was a small and short utilisation spike in the WETH/wstETH market after the withdrawal, but the market returned to normal within around eight minutes as liquidity came back in. Borrow APR also briefly jumped from 1.95% to 5.69% before returning close to its previous level.
Overall, the day after the exploit, August 24, when the news spread more widely, Morpho had its largest daily net outflow in the past 10 days. Some of this may have been users reacting to the exploit, but the move was still within the recent range and net flows turned positive again today.
