Liquidity Hub for BTCFi
Sui aims to grow its ecosystem TVL from to $10B in 2025 specifically through tapping into the BTCFi track with ~$20B worth of BTC in total TVL. At the same time, the capital in BTCFi are desperately looking for low-risk yields, which makes Sui ecosystem the best place for it to land. How can Volo Vault help?
Generating Additional Yields for BTC/LRT BTC Holders with Minimal Risk
Although a few BTC (e.g. WBTC, xBTC etc) are directly incentivized by the Sui Foundation with Sui rewards going to these token depositors on various platforms, the direct incentive is diluted quite thin as more capital is injected to Sui. Not to mention super majority of the medium to small scale wrapped BTC or LRT BTC holders do not have any incentive from the Sui Foundation so their holders have no direct channel to farm yields on Sui.
Volo Vault helps BTC assets generate additional yield through engaging lending protocols. Specifically, these BTC assets are used as collateral on lending protocols to borrow various assets (e.g. SUI, DEEP, WAL etc) at low borrow rates which subsequently are deposit elsewhere with higher rates to generate yield. A simple example is Volo's LBTC vault puts LBTC as collateral on NAVI to borrow Sui (at almost zero borrow rate), stake it to vSui, deposit it back to NAVI and make ~5% deposit rate and loop the borrow-Sui-deposit-vSui strategy. Given the current borrow-Sui-stake-vSui loop strategy generates ~20% APR, and that the LBTC vault dynamically maintaining a 40% LTV on the LBTC-collateralized-Sui-loan position, Volo's LBTC manages to generate an additional 8% APR and boost LBTC deposit APR of 2.52% to 10.52%.
2.52%
8%
10.52%
One-Stop Solution to Onboard BTC Assets
The biggest hurdle for a new BTC assets to be onboarded to Sui DeFi ecosystem is that the liquidity of the asset is limited and it needs to be carefully allocated among DEXes and lending protocols. This is where Volo Vault offers protocol-controlled liquidity solution.
Specifically, each newly onboarded BTC asset can work with Volo Vault to curate a vault for the BTC asset. In turn, the user funds will be divided into two portions, one going to DEXes to provide liquidity on the asset while the other one goes to lending protocols to farm leveraged yield. Not only does the vault provide a vehicle for the wrapped/LRT BTC issuers to channel user funds through, but also that Volo Vault's protocol-controlled liquidity allocates the user deposited assets efficiently between DEX and lending platform, so that the yield is optimized while guaranteeing sufficient liquidity for the asset.
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