Question 1

What are Steakhouse vaults?

Accepted Answer

Steakhouse vaults are noncustodial smart contracts that pool deposits and allocate them across curated strategies to generate yield. You retain full ownership of your assets onchain. Steakhouse manages allocation through a risk framework covering market selection, vault governance controls (timelocks and guardian vetoes), and ongoing portfolio monitoring. Vaults are organized by risk and duration into four strategy tiers: Prime, High Yield, Turbo, and Term.

Question 2

What is the difference between Prime and High Yield vaults?

Accepted Answer

Prime vaults lend against high-quality collateral rated A or above with a maximum duration of one week, targeting the most liquid crypto repo markets. High Yield vaults accept a wider range of collateral rated CC or above with longer maturities, generating higher yields in exchange for increased risk. High Yield vaults cap CC-rated assets at 25% and B/BB-rated assets at 50% of the portfolio.

Question 3

What are Term vaults?

Accepted Answer

Term vaults commit to longer duration positions for potentially higher yields. Prime Term targets 4-6 months aggregated maturity with underlying positions up to 6 months. High Yield Term targets 3 months aggregated maturity with underlying positions up to 2 years. Both maintain a 10% liquidity buffer in their corresponding Instant product to support withdrawals.

Question 4

What are Turbo vaults?

Accepted Answer

Turbo vaults target the highest possible yield using leverage. They employ two main approaches: leveraged looping (multiplying exposure to yield-bearing collateral like wstETH) and carry trades (borrowing USD-stablecoins against crypto collateral to invest in higher-yielding opportunities). Both strategies carry material risk. With looping, returns can turn negative if borrow rates exceed collateral yield, and price slippage during leverage trades can cause execution losses. With carry trades, significant price movement in the collateral asset is an additional risk.

Question 5

Which assets and chains are supported?

Accepted Answer

You can deposit stablecoins like USDC and USDT, as well as ETH. Vaults are deployed across Ethereum, Base, Arbitrum, and additional supported networks. Each vault page shows the specific asset and chain it operates on.

Question 6

What is Morpho?

Accepted Answer

Morpho is the lending protocol underlying Steakhouse vaults and borrow markets. It separates the risk management layer from the core protocol, enabling permissionless market creation. Each Morpho market specifies one collateral asset, one loan asset, a liquidation LTV, an oracle, and an interest rate model. Morpho's core contracts are immutable and noncustodial.

Question 7

What is Box?

Accepted Answer

Box is Steakhouse's vault infrastructure that allows certain vaults, including Turbo and Term strategies, to allocate into protocols beyond standard Morpho lending. Using Morpho Vaults V2 adapters, Box can route funds to modules like Aave V3 and Morpho Blue. You interact with Box through the parent Morpho Vaults V2 vault, not as a standalone deposit product. Box uses timelocks, guardian vetoes, and permissionless shutdown controls to protect users.

Question 8

Can my assets be frozen?

Accepted Answer

No. Morpho is noncustodial, permissionless, and immutable. The protocol cannot freeze your assets. You can withdraw at any time subject to available liquidity.

Question 9

Is it secure?

Accepted Answer

Morpho's core contracts are immutable, open-source, formally verified with Certora, and backed by a $2.5M bug bounty program. They have undergone multiple independent audits. Box is also independently audited. It uses timelocks, an Aragon DAO-controlled guardian veto, and permissionless shutdown controls so vault depositors can intervene if needed. No protocol is risk-free, and users should conduct their own research.

Question 10

How do vault risk ratings work?

Accepted Answer

Steakhouse uses a Multi-Layer Risk Rating framework to rate each investment position. It evaluates three independent layers: the Asset (issuer credibility, credit risk, operational risk), the Platform (protocol resilience and security), and the Market (oracle mechanism, liquidity depth, and credit enhancements like LLTV). Each layer is rated from AA to C, and the weakest link determines the final rating. You can view the rating on any vault page by clicking the rating badge.

Question 11

What do the rating grades mean?

Accepted Answer

AA and A are considered Prime: assets offered within the lower-risk range of Steakhouse products. BB and B are High Yield: assets offered in the higher-risk range of Steakhouse products. CC is Constrained: higher-risk exposures taken opportunistically in limited amounts under strict monitoring. C is Excluded: the highest risk rating, excluded from all publicly distributed vaults.

Question 12

What are the main risks of using DeFi vaults?

Accepted Answer

Steakhouse identifies several risk vectors: credit risk (a collateral asset loses value or backing), counterparty risk (the team behind a collateral asset acts against tokenholder interests), liquidity risk (limited secondary market liquidity for collateral during stressed markets), oracle risk (compromised price feeds triggering incorrect liquidations), and smart contract risk (vulnerabilities in underlying protocols). Steakhouse mitigates these through asset selection, 24/7 monitoring, oracle expertise, and timelocked vault governance with guardian vetoes, but no protocol is risk-free.

Question 13

How does borrowing work?

Accepted Answer

You deposit collateral (such as ETH, wstETH, or WBTC) into a Morpho market and borrow against it. Each market has a Liquidation LTV (LLTV) that sets the maximum ratio of debt to collateral before liquidation. You should maintain a healthy buffer below this threshold. Interest accrues on your borrowed amount at a variable rate set by Morpho's adaptive interest rate model. You can view current rates and the rate curve on each market page.

Question 14

What is a liquidation and how do I avoid it?

Accepted Answer

Liquidation occurs when your position's LTV exceeds the market's Liquidation LTV (LLTV). This can happen if your collateral value decreases, your debt grows from accrued interest, or both. To avoid it, maintain a healthy buffer between your current LTV and the LLTV. You can add more collateral or repay part of your debt to improve your position. Each market page shows your current health factor.

Frequently Asked Questions

Vaults & Strategies

Platform & Security

Risk & Ratings

Borrowing