✨Liquid Vault Mechanics

Fyde pioneers a secure, non-custodial 'liquid vault' representing the cutting edge of DeFi. Owners deposit a variety of tokens into the liquid vault, retain ownership over their tokens and gain enhanced performance, yield and liquidity. This gives users a systematic approach to access the crypto space in a simple, painless solution.

What is $TRSY?

$TRSY (or the Treasury Token) is the liquid vault token that represents the value of the overall vault and that performs in line with the weighted average of the tokens within the vault. Effectively, $TRSY is the tokenised form of the vault.

$TRSY token is backed 1-to-1 with the underlying assets at the time of deposit, and you can either hold onto it for long-term diversification or redeem it for a liquid portion of the underlying assets of the vault. What this means is that while your deposit may fluctuate in value to $TRSY, each dollar of $TRSY is backed by a dollar of assets within the vault. You can also sell $TRSY on the open market or send it to a third party.

The asset allocation within the vault is driven by the goal of generating strong risk-adjusted performance over the long term, reflecting broad market diversification. It does so by setting concentration targets for tokens and providing incentives for traders to rebalance the outperforming token to underweight tokens or $ETH once certain outperformance thresholds of the individual tokens are met.

These tokens are then rebalanced back to their target weights using community driven incentives, effectively "locking in gains" over time. As a result, holding $TRSY delivers to the owner a risk-adjusted performance experience that can be viewed as similar to that of broad crypto market diversification. This process will be abstracted for most users however, and all users will see is a simple concentration limit after which deposits will incur tax.

And of course, liquidity will be optimised for $TRSY to allow holders to transact with it or buy / sell it on the open market.

Depositing Into the Vault / Minting $TRSY

You can access the liquid vault by depositing one of many whitelisted tokens. Once the token is accepted into the vault, you will receive $TRSY.

When depositing, it's essential to keep in mind that one of the goals of the protocol is to generate strong risk-adjusted returns for the user. Therefore, if a deposit unbalances the protocol (i.e. pushes a token too far overweight), an imbalance penalty will be incurred. This is to ensure the performance of the vault for the existing depositors and will be touched on in greater detail in the Fyde Contract section.

Keeping Governance Rights / Minting $govTRSY

You can also choose to retain the governance rights of your deposited tokens simply by switching the "Retain governance" toggle (below). The proportional value of $TRSY is still minted, however, it is automatically deposited into a separate custodial contract —issuing “governance TRSY” ($govTRSY) instead. This enables you to retain the governance power of the deposited tokens by giving you the ability to choose a wallet address or a Snapshot space to delegate to.

Keep in mind the amount of governance rights you have is dictated by the exchange rate of your deposited token with $TRSY. While additional governance rights might not always be available to give if your token underperforms $TRSY, the vault will allocate as many as are available.

You can always withdraw the deposited governance token directly by burning your $gTRSY. Alternatively, you can also unstake $gTRSY and receive $TRSY. This action will permanently give up governance rights but will give you access to greater market liquidity for trades.

Withdrawing From the Vault / Burning $TRSY and $govTRSY

Since we don't think lockups are in line with the ethos of DeFi, you can withdraw from the vault at any time simply by burning your $TRSY or $gTRSY tokens. Similar to depositing, it's essential to consider potential withdrawal penalty on already underweight tokens.

It's important to note that withdrawing from $TRSY does not ensure you will receive your deposited token back. The token that withdrawers will be encouraged to remove from the vault is a token that when withdrawn will further optimises the risk parameters of the vault. Typically, this is a token that is currently overweight in the vault (i.e. a token that has been showing strong performance relative to the other tokens), which for front end users, translates to the tokens that are "Slippage Free".

If you had decided to keep your governance rights upon deposit, then you would have received $gTRSY instead. Burning $gTRSY results in you receiving your originally deposited token ± the prevailing exchange rate at the time of withdrawal.

Alternatively, if you just want $ETH and are worried about unbalancing the vault and incurring imbalance slippage, you're always able to sell $TRSY on the open market for those tokens.

Diagram of the Deposit & Withdrawal Process: