How DeFi Yield works with Morpho vaults

Trezor Suite lets you earn yield on USDC, USDT, and ETH by depositing them into Morpho vaults, where they're lent to borrowers. Borrowers pay interest, and that interest flows back to you.

This article explains where the yield comes from, how the vaults work, and what to know before you start.

What DeFi Yield is

DeFi Yield is a way to earn interest on crypto you already hold. You deposit into a lending vault, borrowers pay interest to use your funds, and that interest comes back to you as yield.

The rate is shown as an APY (annual percentage yield).

In Trezor Suite you can deposit:

• USDC or USDT on Ethereum, into the stablecoin vaults
• ETH on Ethereum, into the ETH vault

Where the yield comes from

The yield comes from real borrowing demand. Borrowers pay interest to access your funds, and that interest is your return.

When more people want to borrow, rates go up. When demand falls, rates drop. The APY you see today reflects current market conditions and will move over time.

What a lending vault is

You don't lend to borrowers one by one. Your deposit goes into a vault: a smart contract that pools funds from many depositors and lends them across approved markets.

A curator manages the vault. The curator decides which lending markets to use, what collateral borrowers must post, and how to adjust risk over time. Depositors rely on the curator's strategy instead of making those calls themselves.

Think of it like putting money into a managed fund. The vault handles allocation. You hold a position in the vault.

Morpho and Steakhouse

Trezor connects you to vaults on Morpho, curated by Steakhouse. Trezor pre-selects these vaults so you don't need to evaluate protocols yourself.

Morpho is one of the largest decentralized lending protocols on Ethereum. It has been audited by multiple independent security firms.

Steakhouse is an independent curator that manages day-to-day allocation inside the vaults.

The vaults Trezor uses are the USDC Prime, USDT Prime, and ETH Prime vaults.

How the vaults are structured

Your deposit doesn't go straight into the Steakhouse vault. It goes into a Trezor vault contract, which then deposits into the connected Steakhouse Prime vault on Morpho.

The Trezor contract applies the Trezor fee and makes bonus reward campaigns possible. It doesn't pick lending markets or manage strategy. Steakhouse does that, and Trezor has no influence over it.

Each Trezor vault is permanently tied to one specific Steakhouse vault. It means nobody can redirect your deposit into a different vault later.

Vault tokens: your deposit receipt

When you deposit into a vault, you receive a vault token that represents your share.

A USDC deposit returns trSHUSDCp. A USDT deposit returns trSHUSDTp. An ETH deposit returns trSHETHp.

The vault token is your claim on the underlying deposit plus any yield earned.

Trezor Suite displays your position in terms of the asset you deposited, so you don't need to track the vault token balance manually. The token stays in your wallet, under your control.

How fees affect your yield

Fees are charged on the yield your deposit earns. Your deposit itself is never touched.

The fee differs by vault:

• Stablecoin vaults (USDC and USDT): 10% of the yield earned. You keep 90%.
• ETH vault: 12.5% of the yield earned. You keep 87.5%. This is a 7.5% Trezor fee, plus a 5% performance fee charged by the underlying Steakhouse vault.

Bonus reward campaigns

Bonus reward campaigns currently run on the stablecoin vaults only.

On top of the regular vault yield, a stablecoin vault may run a temporary bonus reward campaign that pays extra rewards in MORPHO tokens. These rewards come from Morpho's incentive programs and are distributed through Merkl, a rewards platform, on top of the yield the vault already earns.

The ETH vault has no bonus reward campaign. If one starts later, it will appear in the Earn tab next to the vault.

The ETH vault and wrapping

You deposit ETH and you withdraw ETH. In between, Trezor Suite converts your ETH into WETH, because that's the format the vault works with.

WETH (Wrapped Ether) is the ERC-20 token version of ETH. Most DeFi protocols, Morpho included, work with ERC-20 tokens rather than with ETH directly. Wrapping converts ETH into that format at a fixed rate of one to one.

WETH is not a separate asset with its own price. One WETH is always worth one ETH.

You don't need to hold WETH or obtain it yourself. Trezor Suite wraps when you deposit and unwraps when you withdraw. Your position shows as ETH throughout.

Staking or DeFi Yield for your ETH

If you hold ETH, Trezor Suite gives you two ways to earn on it: staking, or the ETH vault. They work differently.

Staking helps secure the Ethereum network. It usually pays the higher rate, but withdrawing takes time, because unstaking involves a waiting period.

The ETH vault lends your ETH through Morpho. It usually pays less, and there's no lockup, so you can withdraw whenever you want.

Compare the current rates for both in the Earn tab before deciding. Rates move, so today's difference may not hold.

For staking, see Staking Ethereum (ETH) in Trezor Suite.

What are the risks?

Depositing into a vault is different from holding the asset in your wallet. Your funds are lent out through smart contracts, and that introduces specific risks.

• Smart contract risk: a bug or exploit in the contracts could lead to loss of funds. Morpho has been audited by multiple firms, but no audit guarantees a contract is exploit-free.
• Liquidity risk: if borrowers are using all available funds in a vault, your withdrawal may be delayed until liquidity returns. The selected vaults are designed to minimize this, but it can happen.
• Variable APY: the rate when you deposit can change at any time. Past rates don't predict future performance.

Two risks depend on what you deposit:

• Stablecoin vaults: USDC or USDT losing its peg to the dollar directly affects your position's value. Both have generally held close to $1, but both have had brief depegs.
• ETH vault: your ETH balance grows, but ETH's price moves on its own. Your position can lose value in dollar terms even while it earns yield.

Your funds are never held by Trezor. They go directly into the vault's smart contracts on Ethereum, and you keep control of your keys throughout. Trezor provides the interface and the security. You remain in full control of your funds.

DeFi Yield FAQs

For steps, gas fees, and withdrawals, see Earn stablecoin yield in Trezor Suite and Earn ETH yield in Trezor Suite.

Where does the yield come from?

Borrowers pay interest to access your funds. That interest is passed back to you as yield. The return reflects real lending activity on the protocol.

Is the APY fixed?

No. It moves with borrowing demand. High demand raises the rate. Low demand brings it down. The displayed rate reflects current conditions.

What is a curator, and who is Steakhouse?

A curator defines how a vault operates: which markets it uses, what collateral is accepted, and how risk is managed.

Steakhouse is the independent curator of the USDC Prime, USDT Prime, and ETH Prime vaults that Trezor uses. They manage allocations across established lending markets and have a publicly documented methodology.

Why Morpho?

Morpho has been live on Ethereum since 2022 and has operated through multiple market cycles. It's one of the largest lending protocols on Ethereum, audited by multiple independent firms. Its vault architecture lets Trezor select specific vaults instead of exposing you to the wider open market.

What are the vault tokens I receive?

ERC-20 tokens (trSHUSDCp for USDC, trSHUSDTp for USDT, trSHETHp for ETH) that represent your position in the vault. They're your claim on your deposit plus accrued yield. Hold onto them and convert back by withdrawing in Trezor Suite.

Do I need to hold WETH to use the ETH vault?

No. You deposit ETH. Trezor Suite handles the wrapping and unwrapping as part of the deposit and withdrawal.

Is WETH a different coin? Is it riskier?

WETH is the ERC-20 token version of ETH, always worth one ETH. Your exposure stays with ETH.

The risks that matter here are the ones that come with any DeFi vault: smart contract risk, liquidity, and a variable rate. Wrapping itself doesn't change what you're holding.

Will I get ETH back when I withdraw?

Yes. Withdrawals return ETH, after the unwrapping transaction signed by your Trezor.

Can stablecoins depeg?

It's possible, and it applies to the stablecoin vaults only. USDC and USDT have generally held close to $1, but both have had brief depeg events in the past. That risk exists wherever you hold the stablecoin and is independent of the vault.

Are my assets held by Trezor?

No. Trezor never holds your funds. Your deposit goes directly into Morpho vaults on Ethereum through smart contracts.

Which vaults have bonus rewards?

The stablecoin vaults may run temporary MORPHO reward campaigns. The ETH vault currently does not.