Vaults

What is a Vault?

YeeldX offers investment instruments that employ a specific set of strategies for yield farming. They make use of automation to continually invest and reinvest deposited funds, which help to achieve high levels of compound interest. By using a YeeldX vault to compound your gains, you save thousands of transactions with their associated gas costs, and precious personal time. Instead of manually harvesting and selling rewards, buying more tokens, and reinvesting that continuously, a vault does all that automatically at a high frequency.

Vaults are the core of the YeeldX ecosystem. In a YeeldX vault, you earn more of the asset you stake in it, regardless if this is a liquidity pool (LP) token or a single asset. For example, vaults where one can stake BTC-BNB LP will result in more BTC-BNB LP over time, effectively growing your share in the liquidity pool and thus allowing for more and more fees and rewards over time.

Despite the name 'Vault' suggests, user funds are never locked in any vault on YeeldX. One could always withdraw from a vault at any moment in time. YeeldX also does not own user funds staked in vaults. However, it is generally best to view vaults as investment tools to store funds for the medium to long term in order to have the effects of compounding really kick in.

When browsing the vaults on the platform, you will see the annual percentage yield (APY), which takes the frequent compounding into consideration compared to annual percentage rate (APR) which does not. You will also see daily interest percentages and the total amount invested in a vault by all users (TVL). Furthermore, one can see what underlying platform the vault is using as a source of revenue.

Each vault can either refer to a pair of tokens invested in liquidity pools, such as CAKE-BNB LP tokens within the Binance Smart Chain ecosystem, or a single token invested in lending platforms or single stake reward pools. After depositing tokens to a vault, the user is supplied with vault specific yBox Tokens which represent their share in the vault. We will elaborate on yBox Tokens in the next section.

Anyone in the YeeldX community can work together to build new strategies and submit them to the YeeldX team for review. However, a new vault will not be accepted if the underlying platform does not adhere to Yeldx's Best Practices.

Summarizing, vaults on YeeldX can:

• Vaults are investment tools that use automation to continually invest and reinvest deposited funds.

• YeeldX vaults help achieve high levels of compound interest, saving time and gas costs.

• Regardless of whether you stake liquidity pool (LP) tokens or a single asset, YeeldX vaults earn you more of the asset you stake.

• User funds are never locked in YeeldX vaults and can be withdrawn at any time.

• When browsing YeeldX vaults, you can see the annual percentage yield (APY), daily interest percentages, total amount invested, and underlying platform.

• YeeldX vaults can use any asset as liquidity and provide one asset as collateral for another.

• They also manage collateral at a safe level to mitigate liquidation risk and can put any asset to work to generate yield.

• Users can sit back, relax, and watch their investments grow with YeeldX vaults

What are yBox Tokens?

A yBox Token is a type of tokenized proof of deposit that is interest-bearing and can be obtained when you deposit into a Yeeldx vault. Each yBox Token is unique to its corresponding vault, for example, yBoxYEELD tokens are received when depositing YEELD into the Yeeld vault. Think of yBox Tokens as a receipt of your vault deposit.

As a Yeeldx user, it's important to hold onto your yBox Tokens and avoid selling or exchanging them. If you do, you will lose ownership of your staked vault assets.

How do yBox Tokens earn interest?

Yeeldx's vaults automatically generate more of your deposited asset in the form of compound interest. By holding yBox Tokens in your wallet, their value increases against the corresponding vault asset. While the number of yBox Tokens in your wallet remains constant, the amount of the vault tokens they can be redeemed for increases. This explains why yBox Tokens do not match the token amount initially deposited in a 1:1 ratio.

How can I redeem yBox Tokens for the initially deposited tokens?

When you want to withdraw the tokens staked for you in Yeeldx's vault, simply initiate a withdrawal transaction to exchange them. The yBox Tokens will be removed from your wallet and destroyed, and you'll get back your deposited assets plus yield.

What are the benefits of the yBox Token system?

Yeeldx's yBox Token system offers a number of benefits:

• yBox Tokens enable any user to withdraw their fair share of deposited funds;

• the system allows you to deposit the yBox Token receipt to a cold or hardware wallet for added security;

• your privacy is protected since you remain anonymous to Yeeldx. Your funds in the vault are not linked to the wallet address from which you made the deposit because yBox Tokens are the only evidence of your stake in the vault. This means you can withdraw your share of funds from a different address by moving your yBox Tokens to it;

• yBox Tokens can have tax advantages. Not only do they simplify bookkeeping, but because you're not selling your rewards or receiving staking rewards directly to your wallet, in many jurisdictions you may not incur the same tax liabilities as when farming your own yield; and

• finally, yBox Tokens can be used as interest-bearing collateral.

How frequently are profits harvested and reinvested in Yeeldx vaults?

Yeeldx vaults typically harvest profits multiple times per day and automatically reinvest them through compounding. The compounding and harvesting rate of a specific vault can be checked using a step-by-step guide provided by Yeeldx.

Why can't individuals manage their investments themselves?

While individuals can manage their investments, vaults help to save personal time and transaction fees. In addition, they help to maintain healthy collateral to debt ratios, optimize for the best possible yields and automatically reinvest earnings. Attempting to manage investments manually could lead to significant inefficiencies. Yeeldx believes in the philosophy of "Sit back and relax, the vault does all the work for you".

What is the vault fee structure?

Most Yeeldx vaults have a performance fee structure that takes a percentage of all harvest rewards. The performance fee is divided and distributed to YEELD stakers, the Yeeldx treasury, the strategist that developed the vault, and the one who called the vault's harvest function. These fees are already incorporated into the APY of each vault and daily rate, so there is no need to calculate them manually. The Deposit and Withdraw module for each vault provides a breakdown of the performance fee and fee structure.

The performance fee is partially allocated to YEELD stakers as additional yield and serves as the primary source of revenue for the Yeeldx platform. A portion of it also funds the Yeeldx treasury, which is used to support platform development, security and other initiatives. The performance fee also encourages community engagement and governance participation, which are critical for future growth and reward users of the platform.

Some Yeeldx vaults may also have a withdrawal fee, which is designed to prevent possible exploitation by bad actors. Without the fee, someone could deposit funds before the harvest() function execution and withdraw immediately after, taking a percentage of the gains generated by legitimate stakers. Withdrawal fees remain in the vault and are shared among vault funds.

Finally, the use of Yeeldx's ZAP tool, when it comes online, will incur a 0.05% zap fee on deposited amounts for entering or exiting vaults. These fees are returned to the Yeeldx treasury through an intermediate batching treasury, which aggregates fees and swaps them into stables before depositing.

What is harvesting on deposit?

Many of Yeeldx's vaults "Harvest on Deposit". This means that when you deposit into the vault, you are also triggering the harvest function of the vault's strategy. By triggering the harvest function, you initiate the collection of pending farm rewards and compounding of those rewards back into the vault tokens for everyone. Yeeldx does this to prevent malicious actors from stealing yield, so a withdrawal fee is not required. This greatly benefits long-term investors. Almost all of the vaults on more inexpensive chains like Arbitrum and Polygon harvest on deposit. You can identify if a vault harvests on deposit by the absence of a withdrawal fee. By depositing and triggering the harvest function, you will receive a reward in the form of the native chain token (e.g. WETH or WMATIC) due to the harvest call fee.

Harvesting on Ethereum

Due to high transaction fees on Ethereum, Yeeldx has introduced several rules to determine the vault's harvesting frequency. If a vault's TVL is above $100k, it will be harvested every 3 days. If a vault's TVL is below $100k but above $10k, it will be harvested every 15 days. If a vault's TVL is below $10k, a community harvest is required. This means that the harvest function on the strategy contract must be manually called, and the transaction fees for doing so will not be subsidized by Yeeldx. Another rule considers the gas prices on Ethereum. If the maxGasPrice is 20 GWei or more, harvests will not be executed as they will become too expensive. This applies regardless of a vault's TVL. The Gelato Off-Chain Resolver that handles the harvests on Ethereum based on the above rules can be found by following this link: Gelato Automate. The smart contract and its parameters, as well as past Executions and Task Logs, are also easily accessible there.

Harvesting on BNB Chain

BNB Chain also has a harvesting constraint in place: If a vault's TVL is below $10k and older than 2 weeks, a community harvest is required.

Does the performance fee get taken out when I withdraw my funds?

No, the performance fees are based on profits and are taken every time someone triggers the harvest() function.

Does the vault page show the APY?

Yes, the displayed APY values reflect the predicted rate earned on a vault in a year. This rate is determined by the underlying platform it uses, the strategy that it is interacting with at the time, the total amount of funds in the vault, and also takes into account the effect of compounding. As a unique feature, all vault fees are included in the APY calculation. What you see is what you get!

What risks do the vaults have?

Yeeldx vaults are audited, but this does not mean that a vault is entirely risk-free. Below are some general vault risks: Assets deposited into the vault have no risk of decreasing in quantity but can decrease in monetary value. As with any smart contract, the ultimate risk is that an investor's funds can end up stolen or unable to be withdrawn. The team takes steps to quantify the security risks of smart contracts and will only interact with ones that meet specific requirements after extensive testing to ensure the underlying platform does not contain "rug-pull" functions. For a detailed breakdown of the steps Yeeldx takes before adding new vaults, please refer to the relevant documentation. More detailed vault risks, or better yet, information on Yeeldx's vault safety expressed by the Yeeldx Safety Score.

What are the different vaults?

Money Market: This vault utilizes lending platforms such as Venus on BNB Chain or Scream on Fantom to generate high yield for coins such as BUSD, BNB, LINK, DOT, DAI, USDT, ETH, or BTCB.

Native Token Farming: This vault takes advantage of the high yield on popular farms by depositing another asset to earn, sell, and compound profits of the native reward token.

Rebalancing Vaults: These vaults would be differentiated based on the strategies which will be applied to the Vaults Want tokens. The three types of Rebalancing Vaults are Native-Stable Vault, Degen Vault and Balanced Vaults, which are powered by AI to automate the rebalancing the strategies applied in addition to automation of the compounding which the standard vaults already offer. More details about the vault mechanism will be released as it gets closer to the launch.

What will I get out when I make a vault withdrawal?

By default, upon withdrawal from a Yeeldx vault, you will receive the same type of token that you deposited, as at Yeeldx you earn what you stake. This means that you will receive the amount you deposited plus the yield generated (minus a potential vault withdrawal fee). For vaults that support Yeeldx ZAP, users can withdraw directly into other assets, including any assets that are part of the relevant liquidity pool and any of the bluechip, native, or stable assets supported for ZAP.

How do LP vaults work?

The liquidity pool (LP) vaults of Yeeldx work by reinvesting the fees awarded to LP participants. In exchange for providing liquidity to the pool, many platforms reward investors with tokens. Yeeldx's vaults regularly harvest these rewards, sell them, buy more of the LP's underlying assets, and then reinvest to complete the cycle. This process compounds the rewards gained from a liquidity pool. Yeeldx creates strategies that automate this process, saving time and gas fees compared to manual farming. This is all done for a small fee that is distributed back to those who stake in Yeeldx's governance pool or in the YeeldFlow vault. A small percentage also goes to the Yeeldx treasury.

How often are balances updated in the vaults?

Pending rewards are not reflected in the balance until they are swapped for the initial deposited token. This can vary depending on the running strategy.

How do vaults get added to Yeeldx?

New potential vaults can be discussed in the Yeeldx Discord. Strategists then add the potential investment strategy to the strategy list, assigning a priority to each new, potential strategy based on its APY, TVL, and sustainability. Developers/strategists then attack the list from top priority to bottom. The official forum is used for submitting actual vault requests. Then the platform where the vault is potentially going to deposit is thoroughly screened to ensure safe smart contracts and no other dangerous traits. For more information on that, please read.

What’s your vault naming process?

Each vault on the Yeeldx platform is named after the token that users can deposit into it. For example, the SUSHI-MATIC LP vault uses SUSHI-MATIC LP tokens for its investment strategy. A ETH vault uses the ETH token, etc. Underneath the vault name, users can find the platform used for investing the token and farming its yields. For example, "Uses: Sushi" means that particular vault invests the token in Sushiswap, a DeFi Dex and liquidity mining protocol.

How do lending vaults work?

The following applies to: Aave, Banker Joe, Blizz, Geist, Scream, Venus, and similar lending platforms. Most Yeeldx single asset vaults utilize decentralized marketplaces for lenders and borrowers. By depositing the initial asset in the vault, Yeeldx deposits it into the lending marketplace and borrows against the token at safe levels of collateral. The borrowed tokens are then redeposited into the platform and used as collateral to borrow more tokens. This cycle is repeated multiple times to generate as much interest as possible from the lending interest and the reward token, which is used to buy more of the originally deposited assets. This strategy is also known as a folding strategy. It is noteworthy that this "leveraged" multi-lending and multi-borrowing is only with the deposited vault token, so there is no liquidation risk due to token price swings.

Transaction fees for depositing into or withdrawing from these vaults are generally higher compared to other vaults due to the multi-supply and borrow cycle.

Marketability risk occurs when the underlying token on the lending platform becomes overborrowed, preventing the vault's strategy from deleveraging (unfolding) to accommodate a withdrawal. This usually happens during market volatility or when there is an ongoing event for which people want to borrow funds from the lending platform. The overborrowed condition will naturally resolve once liquidity returns to the lending platform, a process that can take hours or, sometimes, a few days. Meanwhile, funds always remain safe.

Due to accruing debt/supply interest, users may notice that the deposited token amount may decline ever so slightly between harvests. After the harvest event, the deposited token amount will increase as the yields are compounded back into it.