Vault Architecture

Overview

HYYY's vault system starts with a Gateway Vault that serves as the entry point for users to convert their USDC into USDhy at a 1:1 ratio. From there, users can stake their USDhy into various strategy vaults, each offering different yield-bearing tokens and risk-reward profiles.

Key Features

  • Gateway Conversion: Simple 1:1 conversion of USDC to USDhy
  • Strategy-Specific Staking: Each vault issues its own yield-bearing token
  • Capital Isolation: Each vault operates as an independent capital pool
  • Risk Containment: Issues in one vault cannot affect others

Vault Types

HYYY's architecture consists of a Gateway Vault and multiple strategy vaults, each designed to implement specific strategies with varying risk-reward profiles:

graph TD A[Gateway Vault<br/>USDC ↔ USDhy] --> B[(Conservative Vault<br/>stUSDhyy-C)] A --> C[(Balanced Vault<br/>stUSDhyy-B)] A --> D[(Aggressive Vault<br/>stUSDhyy-A)] A --> E[(More...)] B --> F@{ shape: lin-rect, label: "Position Manager 1" } C --> G@{ shape: lin-rect, label: "Position Manager 2" } D --> H@{ shape: lin-rect, label: "Position Manager 3" }

Gateway Vault

  • Entry point for users to convert USDC to USDhy
  • 1:1 conversion ratio
  • 24-hour processing window for redemptions

Strategy Vaults Examples

1. Conservative Vault (stUSDhyy-C)

  • Lower risk tolerance
  • Focus on market-neutral strategies
  • Higher collateralization ratios
  • Emphasis on capital preservation
  • Real-world Example: Spot-Future strategy on BTC and ETH only, using 1x leverage on futures side delivering ~5-8% APY with minimal risk through established market pairs

2. Balanced Vault (stUSDhyy-B)

  • Moderate risk exposure
  • Mixed strategy approach
  • Standard collateralization ratios
  • Balance between yield and stability
  • Real-world Example: Cross-venue funding rate arbitrage on top 10 market cap assets, using 3x leverage on both sides for ~15-30% APY

3. Aggressive Vault (stUSDhyy-A)

  • Higher risk tolerance
  • Complex multi-leg strategies
  • Lower collateralization ratios
  • Focus on yield maximization
  • Real-world Example: Future-Future pairs with 5x leverage on emerging market pairs, potentially delivering 30%+ APY through higher funding rate opportunities

Yield-Bearing Tokens

Each strategy vault issues its own yield-bearing token when users stake their USDhy, and these tokens can:

  • Automatically accrue yield based on vault performance
  • Can be used as collateral in other DeFi protocols
  • Represent ownership in the respective strategy
  • Have different APY targets based on risk profile

Custom Vaults

Position managers can create new vaults with customized parameters based on:

  • Market pairs selection
  • Leverage levels
  • Strategy combinations
  • Risk tolerance
  • Capital allocation rules

Each vault's performance and risk metrics are independently tracked and managed, ensuring complete isolation between different strategies.

Integration with Position Managers

Position managers interact with vaults through a standardized interface while maintaining strategy-specific parameters:

  • Access Control: Managers are restricted to their assigned vaults
  • Strategy Boundaries: Pre-defined limits and constraints
  • Performance Monitoring: Vault-specific metrics and KPIs
  • Risk Reporting: Segregated risk assessment and reporting