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Overview

coveUSD is Cove’s flagship vault that delivers institutional-grade USD yield through automated capital allocation. By pairing off-chain intelligence with on-chain automation, coveUSD seeks to establish the benchmark rate for safe, blue-chip USD yield on Ethereum.

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Key Features

  • Automated Optimization: Routes deposits through off-chain Silverback bots and Gauntlet’s institutional-grade risk models
  • Dynamic Reallocation: Automatically reallocates capital across top-tier strategies to maximize risk-adjusted returns
  • Proven Performance: Achieved net APYs up to 13.34% over the past three months
  • Transparent Governance: Future active management secured behind a timelock for transparent governance

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How It Works

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Strategy Selection

coveUSD dynamically allocates capital across a curated selection of blue-chip USD yield strategies:

  • Ethena’s sUSDe: Synthetic dollar protocol offering sustainable yield
  • Frax’s sfrxUSD: Frax’s staked USD stablecoin
  • Superform’s SuperUSDC: Multi-protocol yield optimization (Euler/Fluid)
  • Cove’s Boosties sUSDS: Maker/Spark yield vault

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Intelligent Rebalancing

The vault employs sophisticated off-chain intelligence to optimize allocations:

  1. Risk Analysis: Gauntlet’s models continuously assess risk/reward profiles across strategies
  2. Opportunity Detection: Silverback bots monitor yield opportunities 24/7
  3. Efficient Execution: Rebalancing occurs through Programmatic Orders to minimize costs

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Deposits and Withdrawals

coveUSD offers flexible options for entering and exiting positions:

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Deposits

  • Deposit USDC into the protocol
  • Deposits are processed asynchronously during rebalancing cycles
  • Claim your coveUSD tokens after the next rebalancing event

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Withdrawals

Option 1: Synchronous Pro-Rata Redemption

  • Redeem coveUSD for a proportional share of underlying assets
  • Available at any time (except during rebalancing windows)
  • Receive a basket of the vault’s current holdings

Option 2: Asynchronous USDC Withdrawal

  • Request to withdraw USDC directly
  • Processed during the subsequent rebalancing event
  • USDC becomes claimable after ~24 hours

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Performance

coveUSD has demonstrated strong risk-adjusted returns:

  • Historical APY: Up to 13.34% net over the past three months
  • Consistent Yield: Automated rebalancing captures opportunities across market conditions
  • Cost Efficiency: CoW Swap integration minimize execution costs

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Security

  • Audited: Smart contracts audited by Trail of Bits, Pashov Audit Group, Zellic, Quantstamp, and yAudit
  • Timelock: Active management changes subject to governance timelock
  • Fully Collateralized: Always backed 1:1 by underlying assets
  • Transparent: All allocations and rebalancing visible on-chain