Ammalgam USDC Vault

The Ammalgam USDC Vault is a dollar-denominated strategy dedicated to providing reliable TVL to Ammalgam Pairs. It targets a 5% allocation to market-making liquidity, while the remaining capital is actively deployed across approved lending and stable-value yield opportunities. The vault targets zero ETH delta with a tolerance of ±2.5%. ETH exposure introduced by market-making or other yield positions is hedged using borrowed WETH or offsetting assets so that returns are primarily generated from lending spreads, trading fees, incentives, and other carry opportunities rather than the direction of ETH.

Market making remains exposed to negative gamma and impermanent loss even when its initial delta is hedged. For an unlevered, full-range 50/50 constant-product position, a 30% relative price increase produces approximately 0.85% of loss compared with holding the same assets, while a 30% decrease produces approximately 1.57%. With 5% of the vault allocated to market making, the larger scenario represents approximately 0.08% of total vault value before fees.

The vault's ±2.5% delta tolerance creates additional residual price risk. As a simplified stress estimate, a 30% price move against a position at the edge of that tolerance could reduce vault value by approximately 0.75%. Combined with the estimated market-making loss, the anticipated price-related impact could be approximately 0.83% of vault value. This is an illustration, not a guaranteed loss limit: rapid or path-dependent price changes, hedge slippage, leverage, liquidation, asset depegs, high utilization, withdrawal constraints, or smart-contract failures could produce larger losses.

The vault smart contracts are provided by Lagoon, and the keys authorizing movement of the vault's assets are managed through Utila. The vault remains exposed to the risks of Lagoon, Utila, Ammalgam, the assets held, and every external venue in which capital is deployed.