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Sprout allocates your funds across vetted DeFi protocols to generate risk-adjusted yields.

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Current Protocol Partners

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Resolv RLP

  • Type: Stablecoin yield protocol
  • Network: Multiple chains
  • Strategy: Delta-neutral strategies for stable returns
  • Risk Profile: Conservative to Moderate

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Edgex eLP

  • Type: Liquidity provision
  • Network: Multiple chains
  • Strategy: Perpetual protocol liquidity provision
  • Risk Profile: Moderate to Opportunistic
  • Note: 3-day lock period on initial deposit

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Hyperliquid HLP

  • Type: Liquidity provision
  • Network: Hyperliquid L1
  • Strategy: DEX liquidity provision earning fees
  • Risk Profile: Moderate to Opportunistic
  • Note: 3-day lock period on initial deposit

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Gauntlet USD Alpha (Base)

  • Type: Optimized lending strategy
  • Network: Base
  • Strategy: Algorithmic yield optimization across lending markets
  • Risk Profile: Conservative to Moderate

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Aave

  • Type: Lending protocol
  • Network: Multiple chains
  • Strategy: Supply stablecoins to earn lending interest
  • Risk Profile: Conservative

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Morpho

  • Type: Optimized lending
  • Network: Ethereum, Base
  • Strategy: Peer-to-peer lending with improved rates
  • Risk Profile: Conservative to Moderate

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Jupiter Lend

  • Type: Lending protocol
  • Network: Solana
  • Strategy: Supply stablecoins for lending yield
  • Risk Profile: Conservative to Moderate

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Kamino

  • Type: Automated liquidity management
  • Network: Solana
  • Strategy: Concentrated liquidity optimization
  • Risk Profile: Moderate

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Ethereal Delta Neutral

  • Type: Delta-neutral perpetual futures strategy
  • Network: Ethereal L3
  • Strategy: Hedged ETH positions capturing USDe trading rewards
  • Risk Profile: Moderate-High

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How Sprout Selects Protocols

We don’t chase the highest APY. We prioritize safety, sustainability, and risk-adjusted returns.

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Due Diligence Process

Every protocol undergoes comprehensive evaluation:

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1. Business Perspective

  • Team Track Record: Proven founders and builders
  • Financial Health: Protocol revenue, TVL trends, sustainability
  • Governance: Decentralization, upgrade processes
  • Reputation: Community standing, past incidents

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2. Technical Perspective

  • Smart Contract Audits: Multiple audits from reputable firms
  • Code Quality: Open source, well-documented, maintained
  • Security History: Past exploits, response to incidents
  • Upgrade Mechanisms: Timelock controls, multisig requirements

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3. On-Chain Monitoring

  • Liquidity Depth: Sufficient liquidity for allocations and exits
  • Activity Levels: Consistent usage and volume
  • Collateralization: Over-collateralization ratios for lending
  • Market Conditions: Real-time risk signals

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Continuous Monitoring

Protocol selection isn’t a one-time decision. We continuously monitor:
  • Daily: On-chain liquidity, smart contract activity
  • Weekly: Performance metrics, risk indicators
  • Monthly: Business fundamentals, competitive landscape
  • Ongoing: Security alerts, governance changes

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When We Remove Protocols

We immediately rebalance away from protocols if:
  • Security vulnerabilities discovered
  • Significant liquidity drainage
  • Governance concerns emerge
  • Risk parameters deteriorate
  • Better alternatives become available

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How Yields Are Generated

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Lending Yields

Protocols like Aave, Morpho, and Jupiter generate yields by:
  1. You supply USDC to the protocol
  2. Borrowers pay interest to borrow your USDC
  3. Interest is distributed to suppliers (you)
  4. Rates fluctuate based on supply/demand
Typical APY: 5-15%

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Liquidity Provision

Protocols like Hyperliquid, Edgex, and Kamino generate yields by:
  1. You provide liquidity to trading pools
  2. Traders pay fees when they trade
  3. Fees are distributed to liquidity providers (you)
  4. Some pools include additional incentives
Typical APY: 10-25%

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Delta-Neutral Strategies

Protocols like Resolv and Gauntlet generate yields by:
  1. Complex strategies that earn funding rates
  2. Hedged positions to minimize market exposure
  3. Automated rebalancing to maintain neutrality
  4. Consistent returns regardless of market direction
Typical APY: 8-18%

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Protocol Allocation Strategy

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How We Allocate Across Profiles

Steady Profile (0-40):
  • 70-80%: Conservative lending (Aave, Morpho)
  • 20-30%: Stable delta-neutral (Resolv, Gauntlet)
  • 0-10%: Opportunistic (only during low-volatility periods)
Balanced Profile (40-75):
  • 40-50%: Conservative lending
  • 30-40%: Delta-neutral strategies
  • 20-30%: Liquidity provision (Hyperliquid, Edgex, Kamino)
Opportunistic Profile (75-100):
  • 20-30%: Conservative lending (stability base)
  • 30-40%: Delta-neutral strategies
  • 40-50%: Liquidity provision (maximum yield optimization)
These allocations adjust dynamically based on market conditions.

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Multi-Chain Diversification

Sprout diversifies across multiple blockchains to reduce risk: Current Chains:
  • Base: Primary network for deposits, Gauntlet, Aave, Morpho
  • Ethereum: Morpho, Aave
  • Solana: Jupiter, Kamino
  • Hyperliquid L1: Hyperliquid HLP
  • Additional L2s: Edgex, Resolv, Ethereal
Why multi-chain:
  • Reduces single-chain risk
  • Access to best yields across ecosystems
  • Portfolio resilience during network issues

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Risk Disclosures

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Protocol Risks

Even with thorough due diligence, DeFi protocols carry inherent risks: Smart Contract Risk: Bugs or exploits could affect protocol funds
Depeg Risk: Stablecoins could temporarily or permanently lose peg
Liquidity Risk: Extreme market conditions could affect withdrawals
Governance Risk: Protocol changes could negatively impact yields
Oracle Risk: Price feed manipulation could affect lending protocols

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How Sprout Mitigates Risk

  • Diversification: Never allocate >30% to any single protocol
  • Real-time Monitoring: Automated alerts for risk signals
  • Emergency Response: Immediate rebalancing capabilities
  • Conservative Approach: Prioritize safety over maximum APY
  • Continuous Due Diligence: Ongoing evaluation and monitoring