SugarYield Vaults Mechanics

2x reward on caramel/saltish vaults

2 min readFeb 4, 2023

Sugar Vaults

There are two types of Sugar vaults

Saltish vaults
Caramel Vaults

Caramel vaults are based on the hedging strategy. Users can deposit BNB to utilize this vault to hedge against the assets that are prone to risk. Once a user takes a position in Caramel vault; an ERC 1155 token is minted as a representation of the user’s stake in the vault.

In the Saltish vault users can sell their insurance by depositing BNB in the saltish vault. The BNB deposited are converted into a semi-fungible token that is tradable in the Post-diabetes vault.

User Flows

Deposit Period

Users can deposit into Caramel/Saltish vaults during the deposit period of the epoch. After the deposit, funds are locked for the duration of the epoch. The deposit period spans over the first 2 days of the Weekly epochs, and the first 7 days of the Monthly epochs. Note that depeg protection is only initiated after the deposit period ends. If a depeg event happens during the deposit period the vault will not strike.

Oracle

Chainlink oracles are used to monitor pegged asset prices for each vault. The following are the feeds that will be used:

When the Chainlink oracle indicates that the strike price for a given vault has been hit, the epoch will end and vault will be closed. This will initiate a transfer of Sugar vault deposits to the Caramel vault.

Protocol Fee

The protocol collects a 5% fee in the following scenarios:

5% of Hedge Vault deposits
5% of Risk Vault deposits upon a depeg event
no fee is charged if peg is maintained

Example

Consider the following example using $BUSD:

A user or DAO who holds the majority of their risk-off portfolio in MIM can set aside some BNB to purchase a hedge against their BUSD exposure. Users pay a monthly or weekly premium to maintain the Caramel funds.

Conclusion

Sugaryield vaults offers hedge and speculation for pegged assets like USDT/BUSD/USDC and DAI. Participants in vaults can earn upto 2x reward based on their win or lose situation. Sugaryield vaults are audit by one of renowned audit firm SolidProof. Moreover, they have integrated chainlink price oracle to triger price in case of depegg. Protocol is safe, secure and sustainable. So what are you waiting for try your luck!

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