reports

2025.12.01

NOTICE: THIS DOCUMENT IS INTENDED FOR MEMBERS OF OUR INVESTMENT CLUB. IT IS PROVIDED FOR EDUCATIONAL AND STRATEGIC PLANNING PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT ADVICE OR A SOLICITATION TO INVEST. EVERY MEMBER REMAINS FULLY RESPONSIBLE FOR THEIR OWN DECISIONS, RISK MANAGEMENT AND TAX SITUATION. CRYPTO-ASSETS INVOLVE A HIGH LEVEL OF RISK, INCLUDING THE TOTAL LOSS OF CAPITAL. PAST PERFORMANCE – INCLUDING BACKTESTS – DOES NOT GUARANTEE FUTURE RETURNS. EACH READER MUST CONDUCT THEIR OWN DUE DILIGENCE BEFORE MAKING ANY INVESTMENT DECISION.

Table of Contents

Executive Summary

This monthly finance & strategy letter focuses on sustainable yield in an environment where macro uncertainty remains high but on-chain infrastructure keeps maturing.

Across DeFi, stablecoin yields have stabilised in the 5–12% APY range on the most robust lending and base-farming protocols. Higher returns are still possible, but they increasingly rely on short‑term incentive programmes, exotic collateral or complex point-farming structures. Our goal is to position the club on strategies that can remain viable over several years, not just a few weeks.

Two trends structure this edition:

  1. On Morpho, curated USDC vaults on Arbitrum (Gauntlet, Yearn, Edge, Apostro, Clearstar, etc.) now cover the full spectrum from conservative “core” strategies to frontier high-yield products. These vaults stack underlying lending yields with protocol incentives in a transparent, non‑custodial way.
  2. On Pendle, the fixed-yield market for USDC and blue‑chip assets has deepened. Investors can now lock in high single‑digit or low double‑digit fixed APYs over defined maturities, while still keeping optionality via liquid PT/ YT markets.

Within this context, HexaOne Labs has opened a USDC vault on Morpho Arbitrum, designed as a core stablecoin building block for our internal treasury and for club strategies. The target is an average net APY around 8% over a full cycle, by allocating across a basket of curated USDC markets and continuously rebalancing risk.

For this edition, we propose the following high‑level allocation framework:

The rest of this letter details how to implement these ideas with a practical, step‑by‑step approach and clear risk limits.

Market Overview

Macro & liquidity

Global macro data remain mixed. Nominal rates are no longer rising aggressively, but real yields stay positive and growth indicators oscillate between soft‑landing and mild‑recession scenarios. For risk assets, this translates into a regime of sideways volatility rather than a clear bull or bear trend.

In this context, the key driver for crypto remains liquidity rather than narratives. Stablecoin supply has resumed a slow expansion, and inflows into regulated Bitcoin and Ethereum products continue, but the pace is uneven. Activity concentrates around a small set of high‑quality protocols, while long‑tail projects struggle to attract sustainable capital.

Crypto & DeFi

For our investment club, this means:

  1. We should treat yield as the primary engine of performance over the coming months, not price appreciation.
  2. We must avoid over‑exposure to illiquid, incentive‑only yields and focus on structures where the majority of the return comes from fees and real borrowing demand, not just token emissions.
  3. Strategies must be modular, so that we can react quickly if a protocol, chain or issuer shows signs of structural weakness.

Stablecoin Strategy

Protocol Selection

Our stablecoin strategy is built on three layers: Core, Satellite and Opportunistic.

1. Core – Morpho USDC vaults on Arbitrum

Objective: capital preservation with sustainable yield and transparent risk.

Key building blocks:

These vaults can typically deliver 6–9% APY in current conditions while remaining mostly exposed to established lending markets and highly liquid collateral.

2. Satellite – Pendle fixed‑yield USDC markets

Objective: lock in high single‑digit / low double‑digit fixed APYs over defined maturities.

Examples of current opportunities include:

Satellite positions should be sized such that liquidity risk remains acceptable (we must be able to exit without excessive slippage if required).

3. Opportunistic – Curve, Convex & auto‑compounders

Objective: capture temporary excess yields when risk/return is attractive.

This bucket can include:

Yields in this layer can easily exceed 15–20% APY, but must never be treated as structural. Position sizing and holding periods must remain conservative.

Step-by-Step Implementation

A practical allocation per 100 units of stablecoins could look like:

  1. Core layer (60%)
    • 40 units → HexaOne Morpho Arbitrum USDC vault.
    • 20 units → combination of Gauntlet / Avantgarde USDC Core vaults on Morpho.
  2. Satellite layer (30%)
    • 20 units → Pendle fixed‑yield USDC PTs with maturities in the 9–18 month range.
    • 10 units → shorter‑dated PTs (3–9 months) to maintain flexibility and reinvestment optionality.
  3. Opportunistic layer (10%)
    • Up to 10 units → selectively deployed into high‑yield campaigns (Curve/Convex, auto‑compounders, boosted vaults), with clear entry/exit criteria and hard size limits.
  4. Rebalancing rules
    • Review allocations monthly.
    • If Core yield falls below 4% net or a protocol shows structural stress, migrate capital to alternative Core vaults or temporarily park in higher‑quality lending markets.
    • If any Opportunistic position drifts above 15% of the stablecoin book due to performance, rebalance profits back into Core and Satellite layers.
  5. Operational guidelines
    • Prefer Arbitrum for Morpho‑based stablecoin strategies (low gas, deep liquidity).
    • Limit the number of distinct protocols per layer to avoid operational complexity.
    • Use battle‑tested bridges and avoid frequent chain hopping.

Risk Analysis

Main risk factors on the stablecoin stack:

  1. Smart‑contract risk
    • Bugs or exploits in Morpho, Pendle, or underlying protocols (Aave, Curve, etc.).
  2. Stablecoin/issuer risk
    • Depeg or failure of USDC or yield‑bearing stablecoins used in Pendle markets.
  3. Interest‑rate & utilisation risk
    • Sharp changes in borrowing demand affecting variable APYs on lending markets.
  4. Liquidity & exit risk
    • Limited depth on certain Pendle PT markets or niche vaults.
  5. Incentive & governance risk
    • Sudden reduction in token rewards, or governance decisions that change risk parameters.
  6. Counterparty / credit risk
    • For strategies involving RWA‑backed or credit‑based yields (e.g. Maple‑style loans).

Mitigation Strategies

To keep this strategy robust over time:

BTC & ETH Strategy

Protocol Selection

The goal for BTC & ETH remains to combine structural upside on these core assets with disciplined risk management. We focus on three building blocks:

  1. hxBTC directional vault
    • Long‑only BTC exposure on Arbitrum using non‑custodial infrastructure (Aave, Uniswap, Enzyme / Morpho adapters).
    • Objective: capture the long‑term appreciation of BTC while generating additional yield via fees and lending.
  2. Staked ETH & liquid staking derivatives (LSTs)
    • Exposure via wstETH, sfrxETH or similar assets, ideally in audited staking frameworks.
    • Combined with Pendle PT markets or lending to enhance yield while keeping ETH beta.
  3. Delta‑managed LP positions
    • Correlated LP pairs such as WBTC/ETH or BTC/stable on Uniswap v3 or similar DEXs.
    • Optional overlay with hedging (perps or options) if volatility becomes extreme and liquidity allows.

Step-by-Step Implementation

A possible portfolio blueprint per 100 units of BTC/ETH notional:

  1. Long‑term BTC allocation (40 units)
    • Commit to hxBTC vault or equivalent structure.
    • No leverage; objective is pure BTC beta plus strategy yield.
  2. Yield‑enhanced ETH allocation (30 units)
    • Convert to staked ETH (e.g. wstETH) and deploy into:
      • Pendle PT markets with fixed APY, or
      • conservative lending markets on Morpho / Aave.
  3. Correlated LP & hedged positions (20 units)
    • Provide liquidity in WBTC/ETH or BTC/stable bands designed around current volatility.
    • Use tight risk parameters to avoid excessive impermanent loss.
  4. Dry powder & tactical (10 units)
    • Keep a small buffer in cash or highly liquid BTC/ETH on CEX or L2, to be deployed opportunistically after sharp corrections.
  5. Review cadence
    • Re‑evaluate positioning monthly with a deeper review quarterly, aligned with macro events (central‑bank meetings, major ETF flows, regulatory news).

Risk Analysis

Key risks on BTC & ETH strategies:

Mitigation Strategies

Bonus

Internal Treasury: USDC Alpha Vault on Morpho Arbitrum

In parallel to the club strategies, HexaOne Labs has started to structure an “Alpha Vault” for internal treasury management, built on top of the Morpho Arbitrum USDC stack described above.

Objectives:

The same framework can later be adapted for external qualified investors once the legal structure and compliance perimeter are fully validated.

This Alpha Vault will serve as:

Protocols:

Tools & Data:

Thank you all for your commitment and trust as members of our investment club. Your engagement enables us to experiment with institutional‑grade DeFi strategies while remaining disciplined on risk and transparency.

Please remember that all our investment proposals involve risk, and each member remains fully responsible for their own capital allocation. This letter is a working document to guide our discussions and future simulations, not a binding mandate.

Fazio Nicolas
CTO - HexaOne Labs