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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 ​

  1. Deposit USDC into the vault
  2. Receive NVT tokens based on current vault value
  3. NVT represents your proportional ownership

Formula: NVT Received = USDC Deposited × (Total NVT Supply / Total Vault Value)

Withdrawing USDC ​

  1. Burn NVT tokens to withdraw USDC
  2. Withdrawal amount = NVT Burned × (Total Vault Value / Total NVT Supply)
  3. 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:

  1. Automatic Takeover: Vault seizes liquidated collateral
  2. Debt Settlement: Vault pays off borrower's debt
  3. Asset Management: Vault holds and manages acquired assets
  4. 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 TypeRateDescription
Withdrawal Fee0.1% - 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.