How Flipster’s First Defi Vault Delivers Industry-Leading Risk-Adjusted Returns

DeFi Yield Trilemma: High Yield vs. Principal Stability vs. Yield Stability

In DeFi, every yield strategy runs into the same fundamental trilemma. Any product can try to offer high yield, principal stability, or yield stability, but delivering all three at once has proven extremely difficult.

• High yield: how much return a strategy pays.

• Principal stability: how steadily the value of your underlying asset holds over time.

• Yield stability: how predictable the return stream is, without large swings.

Past models illuminate the trade-offs. Luna attempted to deliver high yield, principal stability, and yield stability though manufactured rewards, and the system eventually collapsed. Pendle delivers high yields with strong principal stability, but yields end at maturity and must be replaced. DEX LPs can maintain high yields, but principal moves with market prices. Aave provides both principal and yield stability, but only by giving up high yields.

These examples show a consistent pattern: no existing model has delivered high yield, principal stability, and yield stability simultaneously.

Risk Curators: A Partial Answer to the Yield Trilemma

DeFi “risk curators” emerged as a partial answer. In principle, curators continually search for yield sources with high yield and principal stability, deploy capital while returns are strong, and rotate out as those returns decay. That rotation can smooth yield volatility because capital does not sit in decaying pools for long.

In practice, this approach introduces trade-offs. Continuous shifting creates slippage and execution frictions that grow as capital scales. Large curator funds see APRs compress as TVL increases, slippage rises, and niche alpha pools dilute. Curators also introduce an additional layer of trust, since strategy selection remains at their discretion. Over time, this dynamic pushes curators to take higher risks to maintain returns and attract deposits, which has already led to failures such as Stream Finance.

Introducing Ignight USDT Prime: Simpler, Safer, More Consistent Yield

Ignight USDT Prime (IgnUSDTp) is Flipster’s solution to the limits of traditional risk curator models. The vault is intentionally built to avoid the slippage, dilution, and risk drift that curators face as they scale.

Smaller Caps That Preserve Yield

IgnUSDTp launches with a $10 million cap. A smaller vault size preserves access to niche, higher-yield on-chain pools that would dilute rapidly at larger scales. It also keeps slippage low and allows the strategy to move flexibly between opportunities, improving execution efficiency. The cap may expand over time, but only if doing so maintainsyield quality and the vault’s risk profile.

Strict On-Chain Mandate and Transparency

The vault operates under a strict on-chain mandate, preventing drift into opaque or off-chain opportunities. Flipster verifies that the strategy continually aligns with its risk parameters. We surface the vault’s portfolio breakdown, asset exposures, and key risk limits, including a 25% cap on any single strategy, so users can see how risk is managed.

Built Into Flipster’s Exchange

IgnUSDTp benefits from being offered within Flipster’s exchange environment. Users gain a streamlined experience without managing on-chain execution themselves. Deposits remain capital efficient because they continue to serve as margin for perpetual trading.

Taken together, these features create a more disciplined and sustainable path to risk-adjusted yield, while also providing usability advantages that traditional curator models cannot match.

Why IgnUSDTp Outperforms Similar DeFi Vaults

IgnUSDTp delivers stronger risk-adjusted yield by actively rotating across a diversified set of DeFi strategies. The vault sources returns from three primary engines:

• Lending, which serves as the foundational layer, providing stability and keeping liquidity available for redemptions.

• Pendle PT positions, which introduce a higher-yield component with defined maturities. Early exits from PTs can be sensitive to rate movements and pool depth.

• Delta-neutral basis trades, which can outperform lending in favorable market conditions while still supporting flexible withdrawals.

While IgnUSDTp’s strategy mix might resemble other DeFi vaults, it stands out due to several key advantages: a fully on-chain verifiable portfolio, deposits that can also be used as margin for perp trading, a disciplined $10 million cap that preserves high APY and risk sizing, and a rigorous due-diligence and risk-monitoring framework.

Key Differentiators: IgnUSDTp vs. Other DeFi Vaults

IgnUSDTp: VIP-Level Discipline for All Users

IgnUSDTp brings systematic yield sourcing, on-chain execution, disciplined vault sizing, and continuous risk oversight together in a single vault. It makes professional fund management processes accessible to individual users without requiring them to execute strategies manually.

This disciplined structure balances yield and risk more effectively than traditional curator models, but it remains a DeFi product. Users should still assess smart contract risks, market volatility, and external protocol exposures as part of any allocation decision.

About the Vault Manager

Ignight Capital is a private liquid fund specializing in DeFi, employing a mix of long-short strategies to deliver a robust market-neutral yield annually. With strong roots in traditional finance and quantitative analysis, Ignight brings a deep understanding of market dynamics.

For more information, visit Ignight’s official web-site: https://www.ignight.capital