Operational Control

This page describes the operational control model where YieldFi operates multiple Vaults. The model replaces traditional administrator and agency functions with a software-driven control layer, uses MPC wallets and exchange sub-accounts for custody and execution, and makes the Curator the sole risk manager for each Vault.

Operating model

YieldFi creates multiple Vaults (e.g., Vault A / Vault B / Vault C). Each Vault is a distinct product with its own terms, asset segregation, accounting, and reporting. Operational control is enforced through (i) Vault-level mandates, (ii) software modules that implement lifecycle rules, and (iii) segregated MPC wallets and exchange sub-accounts per Vault.

Control objectives

• Maintain clear accountability for decision-making and execution • Enforce Vault-level segregation across assets, liabilities, cashflows, and reporting • Control asset movements with explicit permissions, logs, and verifiable execution trails • Produce consistent NAV, reporting, and user lifecycle processing at the Vault level

Governance and decision rights

YieldFi • Approves creation, modification, and termination of Vaults • Publishes Vault terms, including deposit assets, fees, redemption SLAs, valuation policy, and risk limits in consultation with the Curator • Approves Curator appointment and maintains a Vault-specific mandate for the Curator • Oversees whitelisting of DeFi protocols and execution endpoints based on Curator requirements

Curator • Operates strategy execution within the Vault mandate • Initiates deployments, rebalances, hedges, liquidations, and position unwinds • Manages Vault-level risk within defined limits and escalation triggers • Provides strategy rationale and post-trade reporting inputs into the software control layer

Roles and responsibilities (software + custody/execution control)

Software Module — Vault Lifecycle & User Operations • Processes deposits and redemptions per Vault terms (windows, limits, queues) • Mints/burns Vault tokens and maintains user balance ledger • Enforces eligibility/KYC gating where applicable • Produces user confirmations and lifecycle event logs

Software Module — Accounting, NAV & Reporting • Maintains Vault-level books (positions, cash, liabilities, P&L, fees) • Calculates NAV per Vault methodology and frequency • Reconciles token supply vs Vault net assets and flags breaks • Produces reporting packs (NAV history, performance, holdings, fees)

Software Module — Payment Waterfall & Fee Engine • Accrues and settles Vault-level fees per terms • Enforces the Vault’s payment priority (fees → payouts/redemptions) • Generates an audit-ready trail of all calculations and settlements

Segregated MPC Wallets (per Vault)

• Segregated on-chain wallets per Vault, typically including: • deposit wallet(s) • collateral/strategy wallet(s) • redemption/processing wallet(s)

• Execute transfers based on authorized instructions and policy checks • Preserve immutable transaction history for all on-chain movements

Exchange sub-accounts (per Vault) • Segregated exchange sub-accounts per Vault used for execution, hedging, and yield strategies • Enforce Vault attribution at the venue level (positions, margin, financing, P&L) • Produce account statements for reconciliation back into Vault accounting

Vault segregation in operations

• Each Vault uses a dedicated MPC wallet set and dedicated exchange sub-accounts • The software modules maintain Vault-specific ledgers and reporting outputs • Asset movements only occur within the Vault’s approved pathways (MPC ↔ DeFi, MPC ↔ exchange sub-account) • Cross-Vault transfers are prohibited

Asset movement controls

Instruction controls • Curator initiates strategy actions and transfers within the Vault mandate • Software enforces policy checks (whitelisted endpoints, limits, timing rules, role permissions) before execution • High-risk actions (new endpoint, large transfer, emergency unwind) trigger elevated checks and escalation

Authorization controls • Role-based access control across software modules and signing policies • Maker-checker approvals for sensitive actions (config changes, whitelist changes, large moves) • Full logging of who approved what, when, and why

Reconciliations • Reconcile MPC wallet balances and transactions against internal Vault ledger • Reconcile exchange sub-account balances, positions, and P&L against internal Vault ledger • Exceptions are tracked with status, owner, and resolution notes

NAV, pricing, and reporting controls

• Each Vault has a defined valuation policy (sources, frequency, cutoffs, fallback rules) • The NAV module produces daily/periodic NAV and flags pricing anomalies • Manual overrides (if any) are permissioned, justified, logged, and reviewable • Reporting outputs remain Vault-specific: NAV, performance, holdings, fees, and token supply reconciliation

Fees and settlement controls

• Fees accrue and settle at the Vault level, not across Vaults • Distributions (if supported) and redemptions are paid from the Vault’s redemption/processing MPC wallet • Any off-chain settlements (e.g., exchange financing costs) are allocated back to the Vault ledger with supporting records

Change management and escalation

• Vault term changes and risk-limit changes follow a controlled workflow (proposal → review → approval → versioned release) • Whitelist changes (protocols/endpoints) are versioned and auditable • Escalation triggers are defined per Vault (limit breach, liquidity stress, exchange margin events, oracle/pricing anomalies) • Incidents produce a post-event report and result in control updates where required