Vaults
To get started with vaults, you need to associate an address with your profile, such as a BTC address. When you decide to lock UNIT into a vault, this action initiates the creation of your vault.
Essentially, when someone makes a deposit, they will send cryptocurrency to this specified address.
Vault Selection:
Your vault is chosen based on the amount of UNIT locked, determining your tranche.
For instance, if you fall within the 100-1000 dollars worth tranche, you can receive funds ranging from 0 to 100 dollars.
Similarly, if you are in the 1000-10000 dollars tranche, you can receive funds ranging from 100 to 1000 dollars.
In scenarios where multiple vaults exist within the same tranche, the least risky vault is selected. This determination is based on the ratio of the amount you have locked in dollars to all that you have already received in dollars. Thus, even if you have locked fewer UNITs than another user in the same tranche, you may still be chosen as the least risky vault, depending on the cumulative received funds.
Vault Operations:
Upon receiving funds, your underlying balance increases. You can unlock your UNIT tokens by burning the equivalent amount of your underlying balance. It's important to note that you cannot receive more assets (in dollar worth) than the value of your locked UNIT.
Here's a breakdown of the process:
Vault Creation:
Add an address to your profile, e.g., a BTC address.
When locking UNIT into a vault, you create one. Incoming deposits will be directed to this address.
Vault Selection:
The amount of UNIT locked determines your tranche.
Based on your tranche, you can receive funds within a specified range.
If multiple vaults are in the same tranche, the least risky one is chosen based on the ratio of locked UNITs to received funds.
Vault Operations:
Upon receiving funds, your underlying balance increases.
To unlock your UNIT tokens, burn the equivalent amount of your underlying balance.
You can't receive more assets (in dollar worth) than what your locked UNIT is worth.
Example:
Suppose you have received 1 ETH. In this case, your underlying balance would be one ETHU.
If you wish to retrieve your UNIT, you must burn one ETHU.
In essence, this mechanism functions akin to a loan, where you lock UNIT and subsequently receive assets.
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