Summary

This proposal recommends a multi-vault approach towards managing the recently passed proposal for Elixir to allocate its sUSDS backing on Morpho against bluechip collateral. This proposal would enable a competitive, value-driving multi-currator approach with sUSDS allocations determined by the Elixir Foundation with input from the DAO.

The MEV-managed vault is designed to enable Elixir to generate conservative, risk-adjusted returns on idle sUSDS holdings while maintaining reinforced security and operational liquidity. It will also enable deUSD minted by bluechip RWAs to access lending and borrowing liquidity.

Leveraging MEV Capital’s track record as a top player in the Morpho ecosystem ensures a robust, sustainable solution for the growth of Elixir’s treasury.

About MEV Capital

MEV Capital is an asset and risk management firm specializing in optimizing investment strategies in DeFi under a market-neutral mandate. It is currently active on Morpho through several vaults across Ethereum and Base, covering ETH-based, BTC-based, and USD-based markets.

Rationale

Elixir’s treasury currently holds approximately $150M sUSDS. Allocating a portion of this capital into a dedicated Morpho Vault would allow Elixir to generate additional conservative, risk-adjusted returns while preserving operational liquidity.

MEV Capital currently curates approximately $300 million across multiple Vaults deployed on Morpho, making it one of the most active curators within the Morpho ecosystem.

Its performance is notably driven by several automated systems deployed by MEV Capital, including liquidity rebalancing algorithms, internal alerting system, and on-chain automation mechanisms to respond to collateral-related issues.

In addition to its technical execution, MEV Capital is a major borrower and active participant on Morpho, leveraging both its own activity and direct relationships with other DeFi borrowers to support consistent Vault utilization.

MEV also holds a $40m notional size deUSD position and was a day-one TVL and liquidity supporter – signifying maximum alignment with Elixir and the DAO.

Allocating treasury assets to a MEV Capital-curated Vault enables consistent Vault utilization and risk-adjusted yield generation through established infrastructure and active management.

Proposed Implementation

Vault Structure

The MEV Capital Elixir sUSDS Vault will be designed to deliver conservative, risk-adjusted yield through a Prime Vault strategy focused on highly liquid, bluechip collateral. This will include deUSD minted via whitelabled RWAs as acceptable collateral.

Key parameters:

Vault Name: MEV Capital Elixir sUSDS Vault Vault Type: Prime (bluechip collateral focus) Owner: Elixir Guardian and Curator: MEV Capital Timelock: 120 hours (5 days) Performance Fee: 7.5%, with 2.5% redirected to the Elixir DAO

Initial Collateral Markets:

WBTC / sUSDS cbETH / sUSDS wstETH / sUSDS deUSD / sUSDS

Future Collateral Opportunities:

All new collateral additions will be proposed on the Elixir governance forum and require community approval before implementation.

Vault Growth Strategy

Borrowing against sUSDS presents a structural challenge: due to its yield-bearing nature, debt positions increase over time, making sUSDS less attractive for borrowers compared to neutral stablecoins like USDC.

Without intervention, this dynamic could limit borrower demand and reduce Vault utilization.

To address this, MEV Capital will implement two complementary strategies:

Borrower Sourcing: MEV Capital, as one of the largest borrowers on Morpho, will leverage its own activity and network to support consistent demand for the Vault.

Collateral Diversification: MEV Capital will progressively propose the addition of neutral, non-yield-bearing stablecoins such as xUSD as eligible collateral, subject to Elixir governance approval.

Together, these measures are designed to maintain high utilization rates, optimize risk-adjusted returns, and ensure long-term Vault performance.

Steps to Implement

Governance Process:

Forum Discussion Period (~1 week) Snapshot Vote (~1 week)

Operational Steps:

Vault Creation: MEV Capital will create the MEV Capital Elixir sUSDS Vault with the parameters outlined above. Vault Seeding: Launch vault and receive an sUSDS allocation determined by the Elixir Foundation with input from the DAO