Vault
The Vault is a liquidity pool where users deposit USDC and receive NVT (Neony Vault Token) representing their ownership stake. The vault serves two main purposes: managing liquidated positions and providing market liquidity.
What the Vault Does
- Manages Liquidations: Takes over liquidated positions to maintain protocol stability
- Provides Market Liquidity: Ensures deep liquidity for trading pairs
- Generates Revenue: Earns from liquidations and 20% of all exchange trading fees
- Tokenized Ownership: NVT tokens represent your share of vault assets
How It Works
Depositing USDC
- Deposit USDC into the vault
- Receive NVT tokens based on current vault value
- NVT represents your proportional ownership
Formula: NVT Received = USDC Deposited × (Total NVT Supply / Total Vault Value)
Withdrawing USDC
- Burn NVT tokens to withdraw USDC
- Withdrawal amount =
NVT Burned × (Total Vault Value / Total NVT Supply) - Small withdrawal fee applies (0.1% - 0.5%)
Revenue Sources
1. Trading Fee Revenue (20%)
The vault receives 20% of all trading fees generated by the exchange:
- Perpetual futures trading fees
- Spot trading fees
- All exchange fee revenue
- Automatically converted to USDC and added to vault value
- NVT holders benefit from this revenue stream
2. Liquidation Revenue
- Earns liquidation penalties (typically 1-5%)
- Potential profit from asset appreciation
- Profits distributed to NVT holders through token value appreciation
Liquidation Management
When positions are liquidated:
- Automatic Takeover: Vault seizes liquidated collateral
- Debt Settlement: Vault pays off borrower's debt
- Asset Management: Vault holds and manages acquired assets
- Strategic Sales: Gradual liquidation to minimize market impact
Market Liquidity
- Provides liquidity to perpetual futures markets
- Ensures deep liquidity for traders
- Maintains market stability during volatility
Fee Structure
| Fee Type | Rate | Description |
|---|---|---|
| Withdrawal Fee | 0.1% - 0.5% | Applied when burning NVT for USDC |
All fees are clearly displayed in the UI before transactions.
Examples
Example 1: Deposit
- Deposit: 10,000 USDC
- Vault State: 1,000,000 USDC value, 1,000,000 NVT supply
- Receive: 10,000 NVT
- New State: 1,010,000 USDC value, 1,010,000 NVT supply
Example 2: Withdrawal
- Burn: 5,000 NVT
- Vault State: 1,010,000 USDC value, 1,010,000 NVT supply
- Fee: 0.3% (15 USDC)
- Receive: 4,985 USDC
Example 3: NVT as Collateral
- Hold: 10,000 NVT (worth 10,000 USDC)
- Collateral Factor: 0.8
- Effective Value: 8,000 USDC
- Max Borrow: 6,667 USDC
Key Benefits
- Dual Revenue: Trading fees + liquidation revenue
- Tokenized Ownership: NVT represents vault stake
- Flexible Usage: Use NVT as collateral or withdraw
- Transparent Fees: Clear fee structure
- Risk Management: Diversified asset approach
The vault ensures protocol stability while providing users opportunities to earn from exchange activities through NVT ownership.