nOPAL Morpho Loop

Thesis

Earns the gap between nOPAL's roughly 11% yield and Morpho's USDC borrow rate by looping nOPAL as collateral to about 2.2x exposure.

Strategy

• Loop up to target: While yield minus borrow rate is at least 1.5 points, it mints nOPAL, posts it on Morpho and borrows USDC until debt is 55% of collateral. • Defend and unwind: If health drops below 1.4, the spread falls short or you switch on exit, it repays debt and redeems nOPAL back to USDC through Nest. • Checks every 30 minutes: Each check logs yield, borrow rate, spread, loan-to-value and health, and repays any drift above the target.

Exposure

• Holds: nOPAL with USDC debt — nOPAL sits as collateral in the Morpho nOPAL/USDC market on Ethereum against borrowed USDC. • Venue: Nest and Morpho — Each mint passes Nest's automatic wallet screening, no KYC; the wallet needs ETH on Ethereum for gas. • Leverage: About 2.2x — Debt is kept at 55% of collateral value; the market liquidates at 86%. • Costs: Borrow interest and gas — Morpho's variable USDC borrow rate plus Ethereum gas for every mint, deposit, borrow and repay. • Data: Nest, Morpho, RPC — api.nest.credit for vault yield, api.morpho.org for borrow rate, and ethereum-rpc.publicnode.com for live position reads Circuit lacks. • On unwind: USDC in 1-4 days — Turning on exit repays debt and redeems nOPAL through Nest, which pays USDC once its redemption queue fills.