VaultCraft
VaultCraft is a permissionless DeFi infrastructure for deploying custom yield strategies with perpetual call options on any EVM chain. VCX holders, or VaultCraftDAO, are responsible for all of VaultCraft's software development. [1]
Overview
VaultCraft is a censorship-resistant DeFi protocol that allows anyone to deploy and LP automated yield strategies with programmed perpetual call options. All revenue earned from users exercising options is used to buyback VCX from the market. VaultCraft uses a VaultFactory endorsed by the protocol to ensure the safety of strategies and contracts. These vaults can interact with various protocols through the ERC4626-Wrapper and be stacked on each other. [2]
VaultCraft offers specialized module functionality for all DeFi primitives, significantly reducing the capital and time needed for retail and enterprise to expand their DeFi exposure and offerings. It allows users with minimal coding knowledge to easily mix and match protocols and strategies to create complex DeFi products. The protocol aims to provide modular tooling for enterprise and retail users to create automated yield-generating asset strategies, contributing to the scalability of the DeFi ecosystem. [2]
VaultCraft also offers users a comprehensive suite of features: optimizing yield through Smart Vaults, deploying custom DeFi strategies using the SDK, easily zapping and depositing across multiple chains with a single click, earning call options (oVCX) through flagship products, boosting oVCX rewards by locking VCX liquidity, and accumulating XP points through interactions with VaultCraft's smart contracts. [2]
History
In 2021, PopcornDAO emerged as a community-driven “DeFi for good” protocol. Over time, the project evolved, introducing VaultCraft v1, which aimed to simplify creating and depositing funds into vault strategies with perpetual call options across the EVM. [3]
Looking forward, VaultCraft v1.5 introduces auto-rebalancing multi-strategy and leveraged Smart Vaults, offering users diversified exposure to any crypto and DeFi narrative with increased capital efficiency. This shift in vision prompted a rebranding, consolidating the project under the name VaultCraft to streamline communication and reflect a new era of development and innovation. [3]
VaultCraft V1.5
On May 6, 2024, VaultCraft announced the upcoming release of VaultCraft V1.5, which aims to make the platform significantly more affordable, simpler, and more capital-efficient. New features coming to the platform include: [16]
XP points
Since its release, approximately 900 unique addresses have minted the Vaultron NFT reward optimizer. Vaultron has become an essential component of the protocol, allowing users to accumulate XP points that can be converted into future VCX airdrops. The homepage now displays users' XP points and offers tooltips on how to earn more points by depositing them into the Smart Vault and enhancing their value. [16]
Multichain Gauges on Arbitrum & Optimism
The increasing adoption of Ethereum has made transactions more costly, raising the expense of claiming oVCX. Multi-chain gauges have been introduced to address this issue, allowing users to earn and claim oVCX through Smart Vaults gauges on Arbitrum and Optimism. [16]
Leverage Farming with Money Markets
Farming oVCX on Layer 2 solutions has become cost-effective, and users can now enhance capital efficiency by collateralizing their crypto, borrowing against it, and depositing the borrowed funds into Smart Vaults. VaultCraft's money market enables users to leverage borrowed liquidity to increase their deposit earnings. [16]
Multi-strategy Smart Vaults
VaultCraft's Smart Vault infrastructure now supports rebalancing multiple strategies within a single vault. This capability integrates LRTs, RWAs, DePin, AI, and $oVCX into a unified Smart Vault experience. [16]
The first multi-strategy Smart Vault will provide diversified exposure across all Pendle LRT markets. Users can deposit a single asset and earn LRT Base APR, Restaking APR, Eigenlayer Points, LRT points, and VaultCraft's call options. [16]
Vaultron NFT Optimizer
Vaultron, VaultCraft’s new NFT reward optimizer, now has a dedicated page. Users can mint VAULTRON for free on Polygon, engage with VaultCraft, and earn XP points. Progress from Bronze to Silver to Gold levels to qualify for VCX airdrops. [16]
Multi-zaps
VaultCraft has partnered with 1inch, Enso Finance, and OpenOcean to enable deposits into Smart Vaults using any asset. [16]
Smart Vault Pages
With the introduction of money markets on VaultCraft, individual pages for all Smart Vaults with gauges have been launched. This feature makes it easier for users to enhance capital efficiency on their deposits. [16]
Technology
DeFi Automations
As it stands, VaultCraft has wrapped over 50 DeFi primitives that users can use in underlying strategies or Smart Vaults. Notable protocols include:
- Aave
- Aura
- Balancer
- Beefy
- Compound
- Convex
- Curve
- Etherfi
- Gearbox
- Ichi
- Ion
- KelpDAO
- Lido
- Origin
- Pendle
- Radian
- Renzo
- Stargate
- Sushi
- Velodrome
- Yearn
Smart Vaults
Smart Vaults (formerly Sweet Vaults) are self-custodial, permissionless, automated asset strategies that generate yield on single-asset crypto deposits. They also have gauges that distribute oVCX, the protocol’s perpetual call option on the governance token VCX. Vaults were created as a response to yield farming and liquidity mining, making searching for the highest yield much more complex than switching between different lending protocols. Smart Vaults are not necessarily yield farming strategies. The underlying strategy may vary, but the principle remains the same. [4]
LRT Smart Vaults
In January 2024, VaultCraft unveiled the rsETH Smart Vault, simplifying the process of depositing into rsETH while maximizing rewards. Restaking can be intricate, involving EigenLayer deposits using methods like ETH, LSTs, or LRT protocols, with differing rewards for each LST deposit. VaultCraft streamlines this process by offering a straightforward path from ETH to ETHx to rsETH, ensuring users receive optimal boost rewards from Stader and KelpDAO while retaining EigenLayer points and yield. VaultCraft’s oVCX mechanics also provide weekly emissions to enhance a vault’s APY, adding further user benefits. [5]
VCX Smart Vault
On May 8, 2024, VaultCraft unveiled their new VCX Smart Vault, designed for all VCX stakeholders. Previously, users could lock their 20 WETH and 80 VCX BPT tokens to participate in voting on oVCX emissions in Smart Vault gauges and enhance rewards on their deposits. There are two ways to earn multiples on VCX liquidity, making the VCX Smart Vault a liquidity incentivization vehicle. [15]
The vault generates compounding interest using Balancer Pool Tokens from the 20 WETH and 80 VCX liquidity pools. These BPTs are staked in a gauge on Aura to earn governance tokens. The rewards are then converted into additional BPT tokens and reinvested into the strategy. For stakeholders holding VCX long positions, this vault offers a hedge by providing call options on VCX (oVCX), with a value of approximately $7K in weekly emissions. With VCX bribes, which launched on May 9, 2024, the yield is expected to exceed 30% APY. [15]
Aura Finance
Aura Finance is a protocol built on top of the Balancer system to provide maximum incentives to Balancer liquidity providers. Aura simplifies depositing into the Balancer gauge system for LPs, ensuring a smooth onboarding experience. Aura enables depositors to achieve a high boost through the protocol-owned veBAL while accumulating additional AURA rewards. [15]
LRT Lend
VaultCraft, in collaboration with Ion Protocol, introduced LRT Lend, an automated money market designed to provide users with an additional yield on their ETH, along with extra LRT and oVCX rewards. Ion Protocol specializes in lending, specifically tailored to support staked and restaked assets in a secure and capital-efficient manner. Users can deposit various validator-backed assets, such as Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens, into Ion, enhancing their exposure to the restaking ecosystem without facing price-based liquidation risk. Additionally, lenders can earn the highest ETH-denominated yield available in the market. [8]
Tokenomics
VCX had the following distribution: [10]
- Liquidity: 75,000,000.00; 7.50%
- Partner incentives: 100,000,000.00; 10.00%
- Fundraising: 125,000,000.00; 12.50%
- Burn matching: 100,000,000.00; 10.00%
- oVCX emissions: 100,000,000.00; 10.00%
- Team: 120,000,000.00; 12.00%
- General Public: 379,996,998.20; 38.00%
veVCX
veVCX represents the voting power of users who supply liquidity to the Balancer 80VCX-20WETH pool. It operates as a unique ERC20 implementation, with each account’s voting power determined by their veVCX holdings. For instance, locking one 80VCX-20WETH LP token for four years grants an initial balance of one veVCX. [11]
oVCX
oVCX functions as a perpetual call option token for VCX, enabling holders to purchase VCX at a discounted rate predetermined by VaultCraftDAO governance. This strategic replacement of VCX rewards with oVCX rewards aims to bolster protocol revenue for initiatives like buyback programs and resource expansion. By allowing loyal VCX holders to acquire VCX at a discounted price, oVCX optimizes incentivization efficiency, revenue reallocation, and continuous token sales. [12]
Implementing oVCX introduces several benefits, including incentivizing users to provide liquidity to Balancer 80VCX-20WETH pools to obtain VCX at a discounted rate, thereby fostering higher protocol revenue. Additionally, the transition of protocol ownership to LPs and subsequently to liquidity providers is facilitated. It reduces sell pressure as users seek to enhance their yield on Smart Vaults and earn protocol revenue by increasing their veVCX holdings. Gauges distribute oVCX incentives to Smart Vault LPs based on their veVCX gauge distribution, encouraging participation in liquidity provision and contributing to protocol growth. [12]
Partnerships
Frax Finance
On December 22nd, 2022, VaultCraft, in collaboration with Frax Finance, announced the launch of the Fraxlend Smart Vault on Arbitrum. Users had the opportunity to deposit their FRAX tokens on Arbitrum into the Smart Vault, facilitating the creation of a money market on Fraxlend with a potential yield of up to 6% APY. Through the Smart Vault, FRAX deposits were utilized as collateral on Fraxlend, generating fTokens in exchange. These fTokens represented the deposited amount and accrued interest over time, with interest being generated from borrowers who paid to borrow funds against their collateral. [13]
KelpDAO & EigenLayer
VaultCraft introduced the rsETH Smart Vault, providing users with an easier method for depositing into rsETH and maximizing their rewards. This new offering allows users to earn rewards, including native ETH staking yield, EigenLayer points, Kelp Miles, and AVS rewards. [14]
