Having been out only for 3 weeks, Umami’s GM Vaults have already surpassed $5M in Total Value Locked (TVL) and have been performing exceptionally well — aligned perfectly with the performance of the four pools on GMX v2,within the GMI, serving as proof that they are working as intended. So, what’s next?
Designed for single-token exposure and developed to be applied across ALL GM markets — especially for markets like $ARB and $WBTC for example, which have lacked substantial, stable, and sustainable single-sided yielding products.
By maximizing scalability and composability, these vaults stand as a crucial tool withing the Arbitrum ecosystem and a cornerstone for future liquidity strategies, offering particular benefits for money-market protocols.
The GM Vaults also represent a significant evolution from other models on the market, being the only permissionless, trustless, and fully automated yielding vaults built on top of GM pools.
And the best is yet to come. How? Read on, anon.
Key takeaways
- STIP Incentives Now Live: The STIP ARB incentives are officially live for the GM Vaults, offering a lucrative farming opportunity in a 30–50% APR boost for depositors through direct rewards from GMX and from the GMX grant.
- Roadmap for GM Vaults: Our future plans for GM Vaults include launching specialized WBTC and ARB vaults, addressing the near absence of single-token yield opportunities for these assets in the market.
- Step-by-Step Guide for Depositing and Staking: Check out our concise and easy-to-follow video guide. It walks you through how to effortlessly deposit into GM Vaults and stake your vault tokens to start earning ARB incentives.
ARB Incentives
Let’s start with the apetizer first! The STIP ARB incentives for GM Vaults have been now active. These incentives are provided by GMX as part of their grant program, and have been extended to continue until March 15th. Currently, with the total incentives of 55k ARB to be emitted and a TVL of $5M, the vaults are offering an impressive APR of 35%. But! We are on the cusp of further incentivizing them with an additional batch of 45k ARB, which will, of course, significantly enhance the performance into the 60s of % APR.
That’s not all! Following this extension, we will utilize the remaining ARB from our oARB campaign to further incentivize the GM Vaults. This strategy aims to target an APR of 50%, which we believe to be achievable up to at least $7M in Total Value Locked (TVL). However, the final APR will depend on the remaining amount of $ARB from the oARB campaign.
The Roadmap Ahead
With the successful release of the GM Index in our first vaults, our aim was to strike a perfect balance — offering stable and competitive yield for a non-leveraged product on ETH and USDC. The next logical step is to introduce vaults for WBTC and ARB. Why these two, you ask? The answer lies in both strategy and market demand.
There’s an undeniable gap in the market for BTC and ARB single-sided yield opportunities, as evidenced by our research and community feedback. We’re working diligently to fill this gap.
It’s important to note that we can apply our this strategy to ANY GM market, and we are not just stopping with WBTC and ARB. Our vision encompasses applying this approach across the entire spectrum of GM markets eventually, ensuring every market can benefit from our single-sided yielding products.
Our team is already deep in the development phase for the upcoming WBTC and ARB vaults, planning to roll them out in the coming weeks. The excitement within our team is palpable, and we are eager to bring these vaults to you, expanding our offerings and reinforcing our commitment to innovation and market responsiveness.
Market Analysis
BTC
When it comes to BTC, the current market offerings are somewhat underwhelming. Data from Defillama indicates that single-sided BTC yields are scarce, and where they do exist, they hover from 3 to 7% APR in real yield. Many of these options also lack scalability; the higher APR ones involve higher risk due to leverage, while others, like lending markets, usually are short term offerings and the numbers are usually skewed (examples with (?) next to their numbers).
ARB
The situation with ARB is even more stark. Defillama reveals an even more limited array of single-sided yield opportunities without impermanent loss, with APR percentages trailing even lower than those for BTC. The offerings either present extremely low APRs or are simply not sustainable.
GM Pools and APR Projections for GM BTC and GM ARB Vaults
But here’s where it gets interesting. The BTC and ARB GM pools are currently generating very attractive returns. The BTC pool is offering an impressive 17% in real yield from fees alone, while the ARB pool is close to a striking 13% APR in real yield.
Thanks to our automated and permissionless hedging mechanism, if we were to launch these two vaults today, the APRs would align closely with the performance of the respective GM pools, minus the fees.
With a total TVL of $130M in the BTC pool and $20M in the ARB pool, it’s evident that these vaults have the capacity to scale to tens of millions.
This scalability not only demonstrates the robustness of our approach but also the immense potential these vaults hold in satisfying market demand.
How to Deposit into GM Vaults
You know, we often hear that simplicity is the ultimate sophistication. In that spirit, depositing into GM Vaults is so straightforward, a cat walking across your keyboard might accidentally do it — but please, keep Fluffy away; this is serious finance!
Nevertheless, we thought, “Why not create a guide anyway?” Maybe for those who like reading manuals before bed.
So, here’s our ‘unnecessarily necessary’ guide to depositing in GM Vaults (and to staking to farm $ARB incentives).
Conclusion
We are incredibly proud of this launch and the strides we’ve made in the DeFi space. Looking ahead, we are committed to expanding our offerings and filling the evident gap in the market with innovative and user-centric products.
Stay tuned as we continue to pave the way for single-sided yields on Arbitrum.
