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Vaults

Silo vaults are ERC-4626 contracts that build on top of Silo markets, allowing:

  • Users to deposit tokens to earn optimized yield without regular management;
  • Managers to whitelist markets and strategically allocate liquidity to them;
  • Underlying markets to receive liquidity based on demand.

Whitelisting​

Whitelisting is where a Silo market is accepted into the vault. Once whitelisted, the vault manager can allocate liquidity from the vault to the market.

Allocating​

When a deposit is made into a vault, the vault manager can allocate the deposit to any of the vault's whitelisted markets.

Risk​

Silo Vaults inherit the risk-isolated design of Silo markets, meaning a vault’s allocation to a specific market is restricted to its counterparty token. As vaults may have multiple whitelisted markets and therefore:

  • A vault depositor’s potential exposure is determined by the vault’s whitelisted markets.
  • A vault depositor’s actual exposure depends on the vault’s fund allocation to specific markets.

Yield​

As liquidity allocators, vaults receive yield from the underlying market to be distributed back to vault depositors.

Since a vault may have multiple whitelisted markets, a vault depositor receives yield based on its actual allocation to markets minus the vault's performance fee.

Rewards​

If any of a vault’s underlying markets receive incentives, Users can claim them the same way they would claim incentives directly from the market.