🔳Vaults

How do the vaults work exactly?

Vaults use complex smart contract strategies to automate yield farming, and grow a users assets without any interaction from the user. Traditionally a user deposits tokens, or LP tokens, into a yield farm, is rewarded with a reward token, and must harvest/sell the reward tokens to add them back into the staking or liquidity pools to auto-compound their investments. Augury’s Vault smart contract strategies deposit a users assets, harvest their rewards, and re-deposits the rewards automatically, increasing the rewards automatically. Augury’s vaults compound every time someone interacts with the smart contract (i.e. deposits or withdraws from the vault), up to once every five minutes, to ensure that rewards are compounded as frequently as possible, to the benefit of all those staked in the vaults!

To understand why this is important, you must first understand the difference between simple interest (APR) and compound interest (APY).

• Simple interest (APR) is calculated on the deposits that never change.

• Compound interest (APY) is calculated on the deposited amount and also on the accumulated interest of previous periods, and can thus be regarded as "interest on interest."

Simple Interest = P × i × n where: P=Principal i=Interest rate n=Term of the loan ​

Compound Interest = Compound Interest= ( P ( 1 + i ) n ) − P Compound Interest= P ( ( 1 + i ) n − 1 ) where: P=Principal i=Interest rate in percentage terms n=Number of compounding periods for a year ​

What are these fees and where do they go?

Augury’s vaults have a 4.5% performance fee, along with a .1% withdrawal fee. These fees help feed the Augury ecosystem and are split half to the dev wallet (0xe2e26bac2ff37a7ae219ecef74c5a1bf95d5f854), half to the community wallet (0x57831e532fc14846511d3b8a86aa692528e06a9a). The performance fee is taken out of the tokens earned through staking in the vault. The withdrawal fee is taken out of the total amount of Omen withdrawn. The community wallet is the wallet used to pay weekly dividends, so despite this fee you are getting part of it back in dividends if you keep your Omen staked!

“But wont selling Omen into the community wallet for dividends create sell pressure on Omen?” Good question! The devs have thought about this and will sell other tokens from the community wallet when available to fund the weekly dividends, ensuring you receive the dividends you are entitled to while also avoiding any additional sell pressure on Omen.

What happens to weekly dividends and airmail when staking in the vaults?

Your weekly dividends will be automatically compounded into the vault as Omen, which means you will not have to claim it on the home page, but also means you will receive it as Omen compounded directly into the vault. Right now the same approach is taken with airmail, any airmail tokens you would have received will be converted to Omen and compounded into your vault as well. As of right now, the team is unable to separate out the airmail tokens, but may be something possible in the future.

If you have Omen staked in an LP pool, single staked, and in the vault, then only the dividends that you receive for the Omen in the vault will be auto compounded. This gives you the flexibility to stake Omen in various ways and receive your USDC dividends in various ways as well!

Why would I use a vault instead of single staking Omen?

A vault provides a simple, automatic staking experience that ensures your rewards are compounded as often as possible (up to once every 5 minutes) without you having to do a thing! Need somewhere to put your Omen, to let it grow passively, and not worry about compounding or reinvesting dividends? Then vaults are for you! Its important to note that the APY in the vault is based on compounding 10 times a day, which is very conservative for most days, and it does not include the compounding of dividends.

If you enjoy the manual control that comes with compounding your rewards, or want to keep your dividends separate, then single staking is a great choice. It provides the manual control some users enjoy with no fee.

Will there be more vaults? When?

This is the first vault to launch, the team is currently working on more vaults and they will launch later this week, so keep an eye out!