How It Works
One loop. Deposit, earn yield while waiting, buy tokens at a discount, redeem at par, keep the spread.
The Loop
- Deposit. LPs deposit USDC into the vault. No lockup.
- Idle yield. USDC goes into tokenized treasuries (3 to 4% base rate) while waiting for sellers.
- Liquidation. When an RWA holder needs to exit, they sell into the vault at a discount to NAV. The discount is set by the risk oracle.
- Redemption. The vault sends tokens back to the issuer at full NAV. The difference is yours.
- Distribution. Profit is distributed pro rata to depositors on top of the base yield.
Risk Pricing
The discount is driven by one thing: how long until the token becomes USDC. The oracle monitors issuer redemption contracts at the smart contract level.
Instant liquidity available: The discount floor is the issuer's redemption fee plus RAVA's spread (i.e. Midas charges 1%, RAVA charges ~1.5%). The vault buys, redeems instantly. A non-whitelisted user or protocol that can't redeem directly with the issuer pays that spread for access.
Instant liquidity unavailable: The discount widens based on how long the vault has to hold the token. Proxy baskets (publicly traded equivalents with decades of return data), CVaR, redemption queue length, NAV buffer, and supply changes all feed the price.
The discount moves on its own. No governance vote. No manual override. All monitored at the smart contract level.
CVaR Tiers
CVaR (Conditional Value at Risk) measures expected loss in the worst case scenarios beyond a confidence threshold.
Main vault: CVaR 97.5. The Basel III standard for bank capital requirements. Conservative but competitive. No first loss capital.
Asset manager vaults: CVaR 90-95. Tighter discount because first loss capital absorbs the tail. The asset manager takes losses before LP capital.
Idle Capital
Deposited USDC sits in tokenized treasuries (currently BUIDL) earning 3 to 4% until a seller shows up. When a liquidation happens, capital gets pulled from treasuries and used to buy the tokens.