Overview

Short overview of Umami GM Vaults

With the crypto sphere expanding, (GMX V2) GM vaults are emerging as a pivotal component in the Arbitrum DeFi landscape. These vaults offer a distinctive opportunity for investors seeking single-sided exposure to premier assets such as $USDC, $ETH, and $BTC with continued additions including $ARB planned. As the vault strategies evolve with the changing landscape, we are confident that GMX V2 and our GM vaults will set the groundwork for an enhanced DeFi experience for every user. By depositing into $ETH, $BTC, $USDC or any future backed GM pools, users will be able to leverage the benefits of liquidity provision and autonomously determine their risk profile by choosing their desired single-sided exposure.

Let’s look at how the vaults will achieve this.

Strategy

Liquidity is deposited into GM pools - Yield Sources, which form the core of the vaults’ operation. To maintain balance and stability in their asset allocation, GM vaults rely on internal netting; a unique and extremely efficient hedging mechanism, developed by the Umami team. The strategy is executed trustlessly by an advanced, distributed network of companion bots that act in a reliable and redundant manner, within the strict and immutable bounds of the on-chain constraints.

High Composability and Scalability

Our GM Vaults stand out in the DeFi landscape due to their high composability and scalability. This means they are designed not only to adapt to varying market conditions and user demands but also to seamlessly integrate with other DeFi protocols.

This composability allows for the creation of new and innovative financial products, enhancing the overall utility and potential of the GM vaults. Moreover, our vaults are built for scalability, ensuring they can handle significant increases in usage and complexity without compromising performance or security.

Internal Netting Algorithm

We have implemented a similar Internal Netting mechanism utilized in the GLP vaults to maintain a balance between assets. This algorithm has been successfully hedging with a TVL of $10 million, achieving this at an extremely low cost of ~$80k.

Rebalancing

Our GM vaults undergo systematic rebalancing at multi-hour intervals looking for a delta variance of ~0.15%. This process is crucial to maintaining the assets in their most effective state, adapting to market shifts and optimizing investment outcomes.