Umami

Yield

Umami is a yield management protocol built on Arbitrum that automates complex hedging strategies on behalf of users to generate sustainable profits.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Umami provides users broad exposure to the Arbitrum ecosystem through its treasury assets.
What we like less
Two-thirds of the core devs are anonymous and the treasury multisig only requires 3/5 signers.
What it means for you
Offers you a great way to earn "real yield" through strong tokenomics and passive income paid in ETH.
Information
Exploit/Hacks
None
Info
Key Metrics
  • TVL: $5.8M (Rank #146)
  • TVL Ranking by Yield: #14
  • Blockchain: Arbitrum
  • Chain TVL
    • Arbitrum: $5.77M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; Zokyo audited in July 2022
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2022; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 20% by total value locked slightly reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • This protocol is susceptible to risks related to yield optimizers which deploy custom strategies to automatically manage user funds
Things to know about Umami

How Umami works

Umami is an Arbitrum-native protocol that is building a variety of highly-scalable vault strategies. These vaults strive to generate sustainable yield on core crypto assets like USDC, ETH and BTC. Umami plans to onboard institutional capital through its subsidiary, Umami Advisors. a U.S.-compliant legal entity. Umami utilizes its treasury assets to enter into yield-generating opportunities across DeFi on Arbitrum. The protocol designed its tokenomics such that 50% of the yield earned is distributed to UMAMI token holders who stake or locked. The other 50% is distributed back into the treasury and used for future yield opportunities. All yield distributed to stakers are paid in ETH, which is a preferred alternative to distributing rewards in its native UMAMI token as this reduces the token's dilution over time. UMAMI has a fixed supply of 1M tokens and no emissions. This makes the token more desirable as the protocol's treasury grows and UMAMI token holder's claims on treasury earnings become more desirable. Umami plans to release its own vault strategies in the future to generate risk-adjusted yield on crypto assets like ETH and BTC. These vaults will likely leverage its ecosystem partners like GMX and Tracer to generate yield. The protocol will take a deposit fee, management fee and performance fee in return, which ultimately gets redistributed back to the protocol treasury and UMAMI stakers.

How Umami makes money

The protocol leverages its own treasury to generate yield across DeFi on Arbitrum. Umami passes on 50% of its treasury earnings every month to its stakers (mUMAMI). The remaining revenue is redistributed back to its treasury and used for future yield opportunities.

How you make money on Umami

You can stake UMAMI (mUMAMI) on the platform to earn 50% of all treasury earnings every month. You can also leverage the mUMAMI autocompounder to automatically convert ETH rewards earned to market buy UMAMI and redeposit into the protocol to compound earnings over time.