DUSD, DETH, and DBIT Machine Update, Week 35-36

This report covers the performance and positioning over the past few weeks of DUSD, DETH, and DBIT. Inside, you will find a clear view of performance drivers, allocation shifts, and risk management decisions across each Machine.

The DUSD, DETH, and DBIT Machines are now permissionless. Users are now able to mint and redeem Machine Tokens directly onchain without prior onboarding, subject to automated onchain compliance screening. This makes the Dialectic Meccanico Machines more accessible and composable across DeFi, and opens the door to direct integrations with aggregators, solvers, and other onchain venues, subject to operational and market conditions and ongoing risk assessment.

DUSD

The DUSD Machine, which executes Meccanico’s proprietary stablecoin strategy on the Makina Protocol, generated an APY of approximately 9.13% on Meccanico’s deployed capital, driven primarily by the Pareto FalconX USDC AA tranche, the Makina DMW Machine, and the Royco Junior Tranche syrupUSDC. For reference, the leading stablecoin strategy Steakhouse High Yield USDC generated 5.04% over the same period. Past strategy performance is not indicative of future strategy performance.

During the period, the Machine unwound the Aave V4 USDG, 3Jane Ecosystem Vault, and Sentora PYUSD positions to increase the liquidity of the Machine’s positions, with the rebalancing executed smoothly and without market impact. In parallel, the Machine rotated into srRoyUSDC/USDC and PT-reUSD, increased its PT-AUSD position, and opened new allocations to the Makina DMW Machine, Fluid Lite USD, and Morpho USDC lending markets, which were subsequently rebalanced across markets to optimize rates.

The Machine’s positions are now skewed towards lending on Morpho, with the Machine continuing to focus on high risk-adjusted real-world-asset (RWA) opportunities while maintaining high liquidity.

DUSD Summary:

DUSD Performance:

DUSD Asset Allocation Breakdown:

DUSD Protocol Allocation Breakdown:

DUSD Chain Allocation Breakdown:

DUSD Exposure:

DETH

The DETH Machine, which executes Meccanico’s proprietary ETH strategy on the Makina Protocol, averaged approximately 3.52% APR on Meccanico’s deployed capital. DETH’s onchain price rose from 1.018844 to 1.020105 ETH, and total value deployed ended the period at 2,593 ETH (around $6.3M), with supply flat at approximately 2,542 DETH.

The levered LST loop anchors positioning, scaling to 16,661 ETH of weETH collateral against 15,037 ETH of WETH debt (~10.3x gross; net 1,623 ETH, or 63% of capital). Allocations to the DQaeETH arbitrage machine (557 ETH, 21%) and the Aave Umbrella ETH sleeve (164 ETH, 6%) held steady.

On 21 August, a simple carry position was opened in Morpho’s PYUSD Main vault. The Machine posted 190 wstETH in the wstETH/USDT market (86% LLTV), borrowed 210,000 USDT at 36% LTV, and swapped into 209,900 PYUSD supplied to the vault. Accounting for 236 ETH (9% of capital), the sleeve keeps the underlying collateral ETH-denominated and staking-yield-bearing while adding a return stream priced off stablecoin credit rather than ETH staking spreads or LRT discounts.

DETH Summary:

DETH Performance:

DETH Asset Allocation Breakdown:

DETH Protocol Allocation Breakdown:

DETH Chain Allocation Breakdown:

DETH Exposure:

DBIT

The DBIT Machine, which executes Meccanico’s proprietary BTC strategy on the Makina Protocol, generated an APR of approximately 1% on Meccanico’s deployed capital over the second half of August. The strategy was split between a borrow position the Morpho carried trade borrowing in the WBTC/USDC mainnet market and allocating across RWA markets and vault curated by Sentora (35.5%) and the Acros LP position (41.01%). The mainnet Morpho market has weathered the bull market quite maintaining the annualized borrow rates below 4.5% - covered by the RWA lending yield (6-7% range) That said, Meccanico remains alert to rate spikes that would affect the carry profitability.

DBIT Summary:

DBIT Performance:

DBIT Asset Allocation Breakdown:

DBIT Protocol Allocation Breakdown:

DBIT Chain Allocation Breakdown:

DBIT Exposure:

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DUSD, DETH, and DBIT Machines are being operated on Makina - the DeFi execution engine.

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Disclaimer

Machine Tokens (DUSD, DETH, DBIT) are products sold by Dialectic Meccanico Ltd. (BVI) as principal seller for its own account and are issued by the relevant Machine smart contract on the Makina Protocol; they are not deposits, fund interests or participations in a collective investment scheme, and Meccanico operates each Machine with its own capital rather than managing assets for Machine Token holders.

The Machine Tokens are sold “AS IS, WITH ALL FAULTS“, their value may fall to zero, and there is no redemption right, as any Buyback is made at Meccanico’s sole discretion and may not occur; no value, return or performance is guaranteed, and past strategy performance is not indicative of future strategy performance.

This material is informational only, is not part of the applicable Makina terms and/or Dialectic Meccanico Ltd. (BVI) Operator Terms, and is not investment, tax or legal advice or any recommendation, solicitation, endorsement or offer to acquire, hold or dispose of any Machine Token, or acquire, hold or dispose of any investment product, vehicle, service or instrument.

Past strategy performance is not indicative of future strategy performance.