diff --git a/defi/supervaults.mdx b/defi/supervaults.mdx index 116e63095..c8e46f2d2 100644 --- a/defi/supervaults.mdx +++ b/defi/supervaults.mdx @@ -4,7 +4,7 @@ description: "Next-generation liquidity management vaults with automated rebalan icon: "vault" --- -Supervaults (mmvault contracts) are Neutron's flagship DeFi innovation that manage liquidity on behalf of users by efficiently allocating deposits into the Neutron DEX (Duality). Using Neutron's integrated infrastructure, they automatically rebalance positions across different price ranges and fee tiers, achieving maximal capital efficiency and improving outcomes for both traders and liquidity providers. +Supervaults are Neutron's flagship DeFi innovation that manage liquidity on behalf of users by efficiently allocating deposits into the Neutron DEX (Duality). Using Neutron's integrated infrastructure, they automatically rebalance positions across different price ranges and fee tiers, achieving unprecedented capital efficiency and improving outcomes for both traders and liquidity providers. The vault contract abstracts away direct DEX interactions from end users, allowing users to interact through standardized deposit and withdrawal flows while the vault autonomously manages liquidity provisioning via Cron-triggered rebalancing logic. @@ -12,7 +12,7 @@ Unlike traditional yield vaults or static liquidity pools, Supervaults actively - Minimize slippage for traders through concentrated liquidity - Maximize fees earned by liquidity providers across multiple fee tiers -- Reduce impermanent loss through dynamic position management and rebalancing +- Reduce impermanent loss through dynamic position management and rebalancing at every block @@ -34,7 +34,7 @@ Supervaults achieve exceptional capital efficiency through several mechanisms: - The vault automatically allocates liquidity across different fee tiers based on market conditions, optimizing for both volume and fee generation. + Every block the vault automatically allocates liquidity across different fee tiers based on market conditions, optimizing for both volume and fee generation. @@ -187,4 +187,32 @@ graph TD
Technical Implementation: Supervaults represent the cutting edge of automated market making, combining Neutron's integrated modules (Cron, Slinky Oracle, Token Factory, and Duality DEX) into a unified liquidity management system that operates trustlessly without external dependencies. -
\ No newline at end of file + + +## Vault Performance Calculations + +#### 30D APY/Hold +The primary metric for calculating vault returns is APY vs Hold. This compares the returns of the vault to holding a 50/50 portfolio of the underlying assets. +Looking at the last 30 days we calculate total returns for the vault ignoring new deposits and withdrawals. +$$ +vault\_return\_30d = (tvl\_close + value\_withdrawals) - (tvl\_open + value\_deposits) +$$ +We then compare this to the 30 day returns for holding an equivalent value of the two underlying vault assets. The resulting value is annualized to produce the final 30D APY/Hold value. +$$ +\Bigg( \dfrac{1 + vault\_return\_30d}{1 + hold\_return\_30d} \Bigg)^{\tfrac{365}{30}} - 1 +$$ + +#### Volume (Vol) +Volume is the total amount of trading activity for a vault. This includes... +1. **Maker Volume** When the vault is providing liquidity that is traded through by other users. +2. **Taker Volume** When the vault is trading through liquidity already on the orderbook. + +#### Total Value Locked (TVL) +TVL is the total value of tokens in the vault. This is effectively the sum of net deposits and vault revenue. + +#### Vault Capacity +Most vaults have a maximum deposit capacity. When the TVL is equal or greater to the vault capacity it is not possible to deposit into the vault. This is done to optimize capital efficiency and ensure APYs remain high. + +#### Pool Balance +The pool balance represents the total amount of each token currently held by the vault. When withdrawing from a vault, users will receive their pro rata share of the vault TVL in this proportion. +Vaults with a higher imbalance represents a greater invetory risk -- the market performance of the over supplied token will have a disproportionate effect on the vault's APY. \ No newline at end of file