Vault Liquidity

For every vault, the Vault Creator deposits the necessary liquidity to cover the two potential scenarios for a given vault: 1) Linked Price Reached and 2) Linked Price Not Reached. Since a vault's configuration always includes interest, the Vault Creator must deposit the required rewards in both tokens to cover the two possible settlement scenarios.

Buy Low Vault - LP Deposit

In a Buy Low vault, the Vault Creator inputs a maximum Quantity of WBTC at the Linked Price. Subscribers then deposit USDC into this vault for the opportunity to buy WBTC at the Linked Price. The LP also deposits USDC to cover the rewards for the Linked Price Not Reached scenario.

Here is the deposit formula for creating a Buy Low vault:

WBTC: Quantity / LinkedPrice * (1 + Yield)
USDC: Quantity * Yield

• The WBTC covers the Linked Price Reached scenario: Subscribers receive WBTC at the Linked Price based on their deposits, plus rewards in WBTC. Vault Creator receives the subscribers' USDC plus any unused liquidity.

• The USDC covers the Linked Price Not Reached scenario: Subscribers keep their USDC principal and get rewards in USDC. Vault Creator receives WBTC plus any unused liquidity.

Sell High Vault - LP Deposit

In a Sell High vault, the Vault Creator inputs a maximum Quantity of USDC at the Linked Price. Subscribers can then deposit WBTC into this vault for the opportunity to sell their WBTC for USDC at the Linked Prince. The LP also deposits WBTC to cover the rewards for the Linked Price Not Reached scenario.

Here is the deposit formula for creating a Sell High vault:

WBTC: Quantity * Yield
USDC: Quantity * LinkedPrice * (1 + Yield)

• The WBTC covers the Linked Price Not Reached scenario: Subscribers keep their WBTC principal and get rewards in WBTC. Vault Creator receives USDC plus any unused liquidity.

• The USDC covers the Linked Price Reached scenario: Subscribers’ receive USDC at the Linked Price plus rewards in USDC. Vault Creator receives the subscribers' WBTC plus any unused liquidity.