Breaking down Valentine

Valentine Vaults

There are two types of Valentine vaults

• Caramel vaults

• Saltish vaults

Caramel Vaults

Caramel vaults are based on the hedging strategy. Users can deposit ETH 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.

Saltish Vaults

In the saltish vault users can sell their insurance by depositing ETH in the saltish vault. The ETH 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.

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 $USDC:

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

Conclusion

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