Enzyme is a decentralised asset management infrastructure built on Ethereum. Using Enzyme Smart Vaults, individuals and communities can build, scale and monetise investment (or execution) strategies that employ the newest innovations in decentralised finance. Yearly Management fee is 0.5% of total AUM. Get 50% if paid in MLN.
The total AUM of all Enzyme Smart Vaults is slightly above $60M. This is however slightly misleading as the top 2 vaults represent ~$40M and are private vaults run by DAOs.
The top vault by AUM is USF Fund 1 at $21M AUM. It seems to be a private vault managed by a defi project called Unslashed Finance. Their primary offering is slashing insurance, allowing ETH stakers to protect against potential losses from validator downtime or errors. Seems like they are using their vault to earn yield on the capital users supply for underwriting the insurance. There is a Medium article explaining this more in-depth.
The 2nd largest vault by AUM is the Nexus Mutual Treasury Yield private ****vault ****with $19M in assets. They seem to employ the same strategy as USF - they have idle capital used for insurance purposes, and want to earn yield on it. Enzyme allows them to do this in a secure way. here is what Nexus Mutual says in a blog post:
Through investment allocations, we are maximizing our returns and preserving capital by investing within our established risk constraints. Diversifying our investment allocations and adhering to our risk constraints allows the mutual to maintain sufficient liquidity to cover obligations and generate long-term growth.
Interestingly, all the ETH in the vault is loaned out via Maple Finance in undercollateralized loans.
The AUM and performance of vaults is constantly calculated and verified via the use of on-chain oracles. Thus, the trustworthiness of the protocol and it’s reported numbers is high. Individual fund operators might not be as equally trustworthy, as one can see from the amounts of fees some vaults have.
I would also take a deeper look into the vault depositors - some of the top vaults have the top 3 depositors represent >50% of the vault AUM. Could this be just a marketing trick? Or have they really found some fools to take 2.75% Management, 15% Perf, 0.5% Entry, 1% Exit, 0.25% Protocol fees from?