Umami Finance leads the new trend of secure and high-yield single-coin staking DeFi

Umami Finance is an innovative force in the field of decentralized finance (DeFi), often referred to as the "Pioneer of Arbitrum". Since its launch in 2022, Umami Finance has been deeply integrated into the Arbitrum ecosystem and continues to provide users with secure and high-yield DeFi products. The following is a detailed introduction to Umami Finance and its groundbreaking GM Vaults.

The Development of Umami

Umami Finance was originally launched on the Arbitrum chain in 2021 as ZeroTwOhm, and transformed in 2022 to focus on developing professional-grade DeFi solutions and officially changed its name to Umami Finance. In 2023, Umami renamed its DAO to Bonsai DAO, but still retained Umami as the product name to ensure wide recognition among US users.

Umami's Core Goals

Umami Finance focuses on creating stable, secure yield products, which they call Vaults. Its GM Vaults, launched in 2024, are based on GMX v2, one of the largest decentralized perpetual exchanges on the market. These Vaults provide one-sided staking of top cryptocurrencies such as $USDC, $BTC, and $ETH, offering the highest yields in the industry according to DeFiLlama.

Data proves strength

In the field of decentralized finance, yield performance is crucial, and Umami Finance's GM Vaults have always set the benchmark for high-yield unilateral products. Since its launch, these GM Vaults have continued to bring high actual returns to users, and the current historical annual yield (APR) is as follows:

The annual interest rate for the two USDC vaults is about 14.5%

The annual interest rate for ETH is about 7%

The annual interest rate for BTC is about 9.2%

These yield data are all basic APRs and do not include additional incentives.

How Vaults Work: Liquidity Provisioning Strategy

Umami’s GM Vaults are specifically designed to avoid impermanent loss, which is difficult to achieve with other GMX-based protocols. Our one-sided Vaults allow investors to fully focus on their preferred assets (USDC, BTC, or ETH) while earning GMX trading fees.

Vault Structure: Each Vault provides liquidity to the corresponding GMX v2 liquidity pool, for example, ETH Vault provides liquidity to the ETH liquidity pool, and BTC Vault provides liquidity to the BTC liquidity pool.

Internal Hedging Mechanism: Vaults hedge exposure internally for free and then seek external hedging to ensure optimal performance. This internal hedging mechanism is very important because it allows assets to be managed efficiently without incurring additional fees.

Future Expansion Plans: As Umami launches more markets, they plan to consolidate all USDC Vaults into one USDC Vaults Index to streamline the process and improve efficiency.

Through this liquidity provision strategy, Umami Finance ensures that GM Vaults maintain a balanced exposure, providing investors with stable high returns. This strategy not only optimizes returns, but also reduces the risk of market volatility.

Performance Stability: Data Analysis

Now, let's take a deeper look at its performance stability.

The PPS (Price Per Share) chart shows the performance of GM Vaults since January and March 2024. These charts clearly show the steady growth of USDC, BTC, and ETH in their respective liquidity pools, reflecting the maintenance of sustained returns.

ETH-USDC Liquidity Pool: Since launch, USDC has an annualized return of 14.6%, and ETH has an annualized return of 7.0%

BTC-USDC Liquidity Pool: Since launch, USDC has an annualized return of 14.2%, and BTC has an annualized return of 9.2%

The stable trading liquidity of the GMX platform has enabled Umami to maintain this performance, and we believe these trends will continue, especially as the market heats up and GMX will attract more traders, driving an increase in fees, thereby increasing our Vaults earnings.

Leader in Yield

How do GM Vaults yields compare to other yield and staking products? When comparing Umami Finance’s Vaults to other products, it shows the absolute leadership of Umami Finance in yield generation.

Umami’s BTC Vault is currently the undisputed leader in DeFi (non-leveraged yield)

BTC Vault Market Dominance: Umami Finance has a unique advantage when it comes to Bitcoin yields. BTC Vault is currently the leader in the DeFi space, offering a market-leading 9.2% APY, verified by DeFiLlama. No other product can match the sustainable, one-sided BTC yield that Umami offers. BTC Vaults consistently generate impressive returns regardless of market movements, without the need for complex strategies or active management. Umami is a great choice for Bitcoin holders who want the highest yield and long-term growth.

USDC Vault Performance: A few years ago, a 14.5% annualized interest rate on USDC would have seemed unbelievable, but Umami made it a reality. Umami's USDC Vaults offer some of the most attractive and reliable stablecoin returns in today's market. Built on a stable, long-term strategy designed to avoid impermanent loss and provide stable returns without the need for high-risk leveraged strategies.

This is ideal for DeFi users who want sustainable yields.

ETH Vault Stability: Umami's ETH Vault offers an annualized interest rate of approximately 7%, providing a safe and stable return on one of the most used assets in DeFi. Similar to other GM Vaults, it is designed to maximize returns and reduce risks. Umami's ETH Vault provides users with reliable ETH returns and is suitable for those who want to increase their holdings but do not want to actively manage or take unnecessary risks.

Security First

In the past two years, Umami has completed five comprehensive audits, including one by Guardian, the same company that audited GMX v2 for 11 months. Umami’s previous product GLP Vaults was also audited twice by Zokyo (Audit 1, Audit 2, Audit 2. href="https://2316168122-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FMxcGyx5kIW5oBPBlyRqM%2Fuploads%2FmmWuHBOPwbdZAMEZaULv%2FUmami_Final_Report.pdf?alt=media&token=6c8087 2c-0976-4f9d-82e0-ae10b4750235" target="">Guardian's review.

In addition, Umami has a team of 15 professionals, each with more than 5 years of experience in the field, including two senior auditors, who continuously review product codes. A member of the Umami team is also an advisor to the New York Traditional Finance Fund, helping to review its DeFi strategy.

Importantly, Umami has never been hacked, which shows its commitment to security and stability, and always cooperates with secure DeFi projects like Chainlink to ensure high standards of security for users.

Strategic Partnerships

Umami has consolidated its reputation by establishing strategic partnerships with leading DeFi projects such as Chainlink, GMX, Arbitrum, Across, Avalanche, Layer N, Camelot, Dolomite, Maia DAO, ApeBond, DefiEdge, TimeSwap, etc. These collaborations are a testament to the strength of the Umami brand and the reliability of its products.

Umami’s GM Vaults also leverage Chainlink’s data streams for low latency validation fees, ensuring the best price execution. Chainlink’s data streams provide confidence that user deposits are safe, further reinforcing our commitment to premium security.

Join Umami Finance’s growing community and start your high-yield journey today

Umami Finance’s GM Vaults are setting the bar for secure and high-performance yields in the DeFi space. With unparalleled BTC, USDC, and ETH yields and a commitment to security, Umami offers DeFi users a reliable long-term yield strategy.

To learn more, join their Chinese Telegram group to communicate with other Umami Finance users, ask questions and get real-time updates. Or join their Discord community to stay up to date with the latest features and collaborations.

Don't miss out on these industry-leading benefits - start your Umami Finance journey today!

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