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iglooHouse Liquidity Strategy

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Fixed‑Rate Engine

Institutional allocators don’t just ask “what’s the APY?” They ask “can this yield get squeezed?”

In standard DeFi, basis trades are often funded with variable borrowing (e.g., money markets whose rates spike when utilization spikes). Pair that with variable strategy revenue, and your margin can disappear overnight.

The House Vault is designed to reduce that risk by locking both sides of the ledger:

  • Fixed revenue via Pendle Principal Tokens (PTs)

  • Fixed cost of capital via Morpho fixed‑rate borrowing

Together, this creates a TradFi‑style Net Interest Margin (NIM) engine: the spread between what the Vault earns and what it pays is structurally more predictable.

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What happens when you deposit USDC

The Vault does not simply hold raw stables or chase variable‑rate farms. It structures capital into a delta‑neutral, fixed‑rate portfolio with liquidity buffers.

If you inspect the Vault, you’ll see a basket of Pendle PT positions, Morpho fixed‑rate margin, and baseline liquid yield assets.

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Portfolio building blocks

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1. PT‑nHYPE: Fixed‑yield basis trade

  • What it holds: Pendle PTs for nHYPE

  • The strategy (high level): execute a delta‑neutral basis position (Long spot HYPE / Short HYPE‑Perp), mint nHYPE, then split on Pendle into PT‑nHYPE + YT‑nHYPE

  • The institutional edge: the Vault can sell YT‑nHYPE to participants who want the variable yield/points stream, while holding PT‑nHYPE to maturity to lock a fixed‑rate principal redemption profile

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2. Morpho fixed‑rate margin: locked cost of capital

  • What it holds: fixed‑rate borrowing positions via Morpho

  • Why it matters: variable borrow rates (e.g., utilization spikes) are how profitable basis trades get squeezed

  • The institutional edge: by funding margin at a fixed rate, the Vault stabilizes its cost of capital—so strategy returns aren’t silently eaten by borrow‑rate volatility

Pendle PTs lock the asset yield side. Morpho fixed‑rate borrowing locks the liability side. That pairing is the core NIM mechanism.

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3. PT‑nLP: Fixed‑rate market making via ABM

  • What it holds: Pendle PTs for nLP (Nunchi Liquidity Provider)

  • The strategy (high level): allocate stables to fund the Agentic Binned‑liquidity Manager (ABM), then split nLP on Pendle into PT‑nLP + YT‑nLP

  • The institutional edge: market‑making revenue can vary day‑to‑day with volume/volatility; selling YT‑nLP transfers that variable upside to speculators, while holding PT‑nLP targets a more predictable, fixed‑rate return profile for House LPs

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4. Baseline yield assets: liquidity + floor

  • What it holds: liquid, high‑quality stable yield positions (e.g., sDAI and similar receipt tokens)

  • Why it holds them: maintain withdrawal buffers and earn a “floor” yield on capital not currently allocated to PT structures

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Why this is institutional‑grade

The House Vault is built around a simple principle: don’t promise stability while holding unhedged variable rates.

By pairing PT‑locked revenue with fixed‑rate margin, the Vault is designed to:

  • reduce “squeeze risk” from borrow spikes

  • reduce day‑to‑day variance from variable yield streams

  • separate market roles cleanly: Players buy volatility (YTs), House LPs hold fixed‑rate exposure (PTs)

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Risk notes

This design reduces variance—it does not eliminate risk. Users should understand smart contract risk, peg risk on stable collateral, basis/hedge risk, market discontinuities, integration dependencies (Pendle/Morpho), and liquidity conditions.

Nothing here is financial advice or a guarantee of returns.

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