How Goo Exchange vaults work

Where does a vault's yield come from?

From those trades. A vault's pool charges no swap fee, so the arbitrage profit is what the vault earns. How much it earns depends on how often and how far its two tokens' prices move apart on other venues; it is not a fixed or guaranteed rate.

What happens to each trade's profit?

The executor pays every trade's profit through the vault's own splitter, on chain. 75% is added back to the vault's liquidity, so it compounds for every holder. 25% goes to the protocol: half to the FeeJar, which auctions it for GOO and burns the GOO, and half to the development fund. Like every Goo Exchange product, vaults feed GOO's buyback and burn; the flywheel calculator shows how.

How do I deposit?

• Both tokens. The vault takes them in the proportion it already holds and mints shares for your part; anything it doesn't need stays in your wallet.
• One token or ETH. The vault zapper buys the two tokens through KyberSwap and deposits them in one transaction, protected by your minimum shares and a deadline.
• Near the market. A deposit can name the price range the vault's pool must be in and reverts outside it; the app sets that band from market prices.

Shares are an ERC-20 token at the vault's own address (gooVAULT, 18 decimals). Depositing and withdrawing cost no fee; a zap pays its swaps' route costs and price impact. Each vault caps its shares, and a cap only ever stops new deposits.

Can I withdraw any time?

Yes. There is no lock-up. Burning shares pays your part of everything the vault holds, in both tokens. A zap out sells both into one token or ETH in one transaction, with a minimum you set. If an issuer pauses a tokenized stock or freezes an address, the vault records that token as yours to claim later and pays the other token as normal.

What if a vault's price is away from the market?

Between the executor's trades a vault's price can sit away from the market, and the app shows how far. Deposits and withdrawals still work, at the vault's own price and proportion. When the executor trades the vault back, the profit goes to the vault and counts for every holder.

How is a vault's range managed?

Each vault keeps its liquidity in a range around the price, set when the protocol launches it: a base position and a limit order with what the base can't hold. Near the edge of that range the vault can be re-centred around the price without swapping anything, and anyone can trigger a re-centre once it is due. The price source a vault re-centres by can only be replaced with two days' public notice.

What are the risks?

• You hold both tokens. As prices move the vault sells the token that rises and buys the one that falls, so after a large move you hold more of the weaker token. In a strong move one way you can end with less than if you had simply held the two tokens, and the vault's share of trading profit may not make up for it.
• Small tokens can fall fast. A vault with a low-cap token carries that token's full risk, including losing most of its value.
• Tokenized stocks can be paused or frozen by their issuer.
• Smart contracts. The vaults are new contracts. Only put in what you can afford to lose.

Which vaults are live?

The protocol launches and curates each vault; there is no public create flow. The Vaults page lists the live vaults with their earnings and recent trades, and the contract documentation lists each vault, its pool, the vault factory, the zapper and the executor.