Flow of Funds

This page describes the standard flow of funds where YieldFi issues multiple Vaults. Each Vault is a distinct product/strategy with segregated asset control and accounting using segregated MPC wallets and segregated exchange accounts per Vault.

Structure at a glance

YieldFi creates multiple Vaults (e.g., Vault A / Vault B / Vault C). Users deposit into a specific Vault, and YieldFi issues the Vault tokens to the user under that Vault’s terms.

Core principle: assets, liabilities, cashflows, and reporting are Vault-specific, implemented via segregated MPC wallets and segregated exchange accounts per Vault.

Parties and roles

• Users: Deposit into a specific Vault and hold the Vault tokens.

• Issuer — YieldFi: Creates Vaults, defines Vault terms (with Curator input), issues Vault tokens, and oversees service providers and controls.

• Vault: Product-level pool with its own asset segregation, accounting, and terms.

• Curator: Executes strategy for the Vault and manage risks w.r.t. deployments, rebalances, and liquidations.

• Segregated MPC Wallets (per Vault): On-chain wallets dedicated to each Vault (deposit, collateral/strategy, redemption/processing), used to receive, hold, and move assets.

• Segregated Exchange Accounts (per Vault): Vault-specific exchange sub-accounts used for execution, hedging, and yield strategies (where relevant).

• Administrator / Accounting / Paying Agent function (internal or outsourced): Maintains vault level assets and token supply, calculates NAV, processes mint/burn and redemptions, and produces reporting.

Diagram — end-to-end flow of funds

Users
  |
  | (deposit request; eligibility/KYC gates as applicable)
  v
Issuer: YieldFi
  |
  | creates Vaults + publishes Vault terms + appoints Curator
  v
+-------------------+    +-------------------+    +-------------------+
| Vault A           |    | Vault B           |    | Vault C           |
| (Product/Strategy)|    | (Product/Strategy)|    | (Product/Strategy)|
+-------------------+    +-------------------+    +-------------------+
  |        |                 |        |                |        |
  |        |                 |        |                |        |
  |   Segregated             |   Segregated            |   Segregated
  |   MPC Wallets (A)        |   MPC Wallets (B)       |   MPC Wallets (C)
  |   + Exchange Accts (A)   |   + Exchange Accts (B)  |   + Exchange Accts (C)
  |        |                 |        |                |        |
  v        v                 v        v                v        v
Deploy into DeFi / Exchanges / Hedging / Yield Strategies (per Vault mandate)
  |
  v
Strategy P&L returns to the same Vault’s MPC wallets / exchange accounts
  |
  v
Fees -> Distributions (if any) -> Redemptions (per Vault rules)

Step-by-step asset flows

Deposit and issuance (User → Vault)

1. User selects a Vault (e.g., Vault A) and initiates a deposit.

2. User transfers assets to Vault A’s dedicated deposit MPC address.

3. Operations/admin logic validates receipt and eligibility checks (as applicable).

4. YieldFi issues the Vault token/position to the user under Vault A and updates Vault-level accounting.

Deployment / execution (Vault → DeFi / Exchanges)

1. Assets stay in Vault A's deposit MPC address.

2. If the strategy uses exchanges, assets may be transferred to Vault A’s segregated exchange accounts (or mirrored/hedged there).

3. Otherwise, Curator executes strategy actions for Vault A:

   • DeFi deployments (whitelisted protocols/endpoints as applicable),

   • exchange execution / hedging,

   • rebalances and risk actions.

Income and P&L collection (DeFi / Exchanges → Vault)

Strategy income, realized P&L, and principal flows return to:

• Vault A collateral/strategy MPC wallets, and/or

• Vault A exchange accounts, with periodic sweeps back to MPC wallets where applicable.

Fees and expenses (paid from the Vault)

Vault-level management and/or performance fees (as applicable) are accrued and settled from Vault A assets only.

Distributions (if the Vault pays out)

If Vault A supports periodic payout, YieldFi processes distributions from Vault A’s redemption / processing MPC wallet to user wallets, per Vault terms.

Redemption (Vault → User)

1. User submits a redemption request for Vault A (per redemption rules, cooldown period, and limits).

2. YieldFi calculates redemption amount based on Vault A’s NAV/price and applies fees (if applicable).

3. Vault A sources liquidity by:

• using on-hand liquidity buffers, and/or

• unwinding DeFi positions, and/or

• closing exchange hedges and transferring assets back to MPC wallets.

1. YieldFi pays the user from Vault A’s dedicated redemption/processing MPC wallet and burns/reduces the user’s Vault token/position.

In summary, Segregation is enforced at the Vault level through a dedicated MPC wallet set per Vault (deposit, collateral/strategy, and redemption/processing), plus segregated exchange sub-accounts with clear Vault attribution. YieldFi maintains Vault-specific books and records—positions, P&L, NAV, and token supply/user balances—and prohibits cross-Vault transfers.