Research - Carry Vaults

[RedVeil]

How can we use fixed term products and renew the term at the end of the latest term to stay in the product continuously? (Y2k option, gmx option...)

Maybe Ribbons Vaults can give us some insights about that since they sell options continually.

[RedVeil]

Create a continuous adapter to mint y2k and exercise options on a weekly basis: https://app.y2k.finance/mint We might be able to take some inspiration from ribbon as they sell weekly options through gnosis auctions: https://app.ribbon.finance/v2/theta-vault/T-ETH-C https://github.com/ribbon-finance/ribbon-v2/tree/master/contracts

[mayorcoded]

[WIP]

Research Notes:

• Core Logic
  • Cycle Management: A fixed-term trade’s lifecycle ends at the end of the term defined for the trade. The term's definition often depends on the duration it should be active, such as weekly, monthly, or other timeframes. We need to have a vault lifecycle manager that is responsible for managing the lifecycle of options and adapter interactions.
  • Vault Lifecycle Manager:
    • Close a cycle option cycle
    • Rollover existing deposits into a new option cycle
    • Manage the creation of new options product/cycle if necessary
    • Manage cycle expiry, etc.
  • Deposit Management: Underlying asset deposits are done per cycle. The deposit flow accounts for the existing shares of a user and mints new shares for them after every deposit, putting into consideration the price per share for that round.
  • Withdrawal Management: Withdrawals are split into two phases: the initial phase and the complete phase. The initial phase of a withdrawal initiates a withdrawal and places it in a withdrawal queue. On the completion of a cycle, all queues withdrawals are available for complete withdrawal, this makes a complete phase.
  • Roll Over Management:
    • Calculate the shares to mint for pending new deposits while a cycle was ongoing
    • Minting of new shares should be done based on price per share.
    • Price per share is factored into new minting to ensure that new deposits are not exposed to previous vault balance changes due to PnL.
    • Reallocate the new vault balance as collateral to the new option/product
• Performance Fee/Management Fee: These fees are charged on the AUM and premiums earned before the trade or product is rolled to the next cycle. It is only charged when there is no loss.
• Access Control and Roles
  • We need to have specific roles for managing the continuous operations of fixed-term vaults
  • Who has access to end a fixed-term vault and move the vaults into the next cycle?
• Are we going to use chainlink keepers to handle closing and opening new cycles?

Price per share: ((total balance - pending amount) decimals)/total supply Asset to shares: (asset amount / total assets total shares) Shares to assets: (shares / total shares) * assets

Y2K Vault Mechanics

• Earth Quake Vaults are of two kinds: Hedge Vaults or Risk Vaults
  • Deposit: User deposits are locked for an epoch into either a hedge vault or a risk vault and deposit tokens (ERC-1155 tokens) are minted to the user. The deposit tokens can be staked for IFO tokens.
    • Deposit Period: A period during which a deposit is accepted for an epoch. The deposit periods are 2 days for the weekly epoch and 7 days for the monthly epoch. Deposits made outside of the deposit period are queued up in the 24/7 deposit queue for enrolment in the next epoch.
    • Deposit Epoch: There are two epochs where users can deposit: Weekly Epoch and Monthly Epoch
    • Auto roll-over: Depositors can choose to roll over their deposits into new epochs

Questions

• Can we accept deposits into a new cycle while the cycle has kicked off? Or do we accept deposits into the vault and then queue them up for the next cycle?
• Should users have the option to opt in/opt out of their deposits for a rollover?