Spool Glossary
Short explainers on all Spool specific terms used within this documentation.
For a more detailed breakdown of items and their relevant functions, please see individual sections of the documentation.
The Allocation Provider is a Smart Contract that calculates the strategy allocations based on various input parameters, such as Risk Scores and APYs, but is separate from the Risk Model Provider.
Spool supports the ability for multiple implementations of the Allocation Provider, giving potential different ways of calculating allocations within the Smart Vaults.
The Asset Group is a pair or a set of assets used as an underlying currency in Smart Vaults.
When a user deposits into a Smart Vault, a D-NFT or a Deposit-NFT is minted as a Deposit Receipt. After the next DoHardWork(), the D-NFT can be burned in exchange for the Smart Vault Token (SVT) it represents.
Do Hard Work is a function call that compounds yield, manages reallocation between Strategies, and handles pending deposits/withdrawals.
Entry and Exit Actions are a set of predefined but customizable actions that can be tied with users’ actions, like depositing into the Smart Vault or withdrawing from it. These actions are selected and configured during the Smart Vault Creation Process.
Entry and Exit Guards are a set of predefined but customizable checks that can be put on users’ actions, like depositing into the Smart Vault or withdrawing from it. These checks are selected and configured during the Smart Vault Creation Process.
Fees refer to the various fees applied within Spool Smart Vaults. They are platform fees, the Vault Owner Fee, and the Management fee.
The Ghost Strategy is a Strategy that is not connected to any specific Underlying Protocol and serves as a mechanism for the removal of actual Strategies in case of an emergency.
Ghost Strategies are generally not visible on the User Interface and are included in all Smart Vaults by default in order to allow for replacing existing Strategies if they are removed.
For more information see Understanding the Buffer System, Withdrawing from a Vault, and Depositing to a Vault.
The core condition for charging a performance fee is:
When the above statement concludes to "True" a positive performance has been generated and the Performance Fee is calculated over the positive result.
An example would be:
Deposit: $10, withdrawal: $12
$2 is the "performance" and x% of Performance Fee will be charged over $2.
The Platform is everything Spool related, also referred to as the Spool Ecosystem.
A protocol is an external Smart Contract or a set of Smart Contracts with some yield-generating mechanism. Understanding a Yield Generator
Spool Smart Vaults route deposits into protocols in exchange for a part of the yield. The interactions are done via the Strategies, which wrap the protocol into a unified interface in the Spool Ecosystem.
Underlying protocols accrue yield but also emit extra reward tokens.
During DHW these are swapped into the underlying asset and reinvested back into the vault.
Reallocating within the Spool Ecosystem refers to a term used to "reallocate" the assets within a given Smart Vault. When the APY or the Risk Score of a Strategy changes, the Smart Vault in conjunction with the Allocation Provider will automatically reallocate the assets within the Smart Vault to optimize for the best risk/reward.
These are Models, created by a Risk Model Provider, that use a variety of factors to assign a Risk Score to each Strategy. Or in simple terms: "A Risk Model quantifies the Risk Score per Yield Generator."
When creating a new Smart Vault, the Vault Owner can select from the available Risk Models to apply against the Strategies selected for their respective Smart Vault.
The Risk Model Provider creates and is responsible for maintaining a Risk Model. As a whitelisted EOA, they are authorized to invoke RiskManager.setRiskScores.
These take into account various factors to assign a Risk Score to each Strategy and can be implemented by users when creating their Smart Vaults.
When a given Smart Vault Creator needs an automated on-chain risk provider, they can implement their own Smart Contract to invoke RiskManager.setRiskScores.
A sliding scale which is selected by a user when creating a Smart Vault which is combined with the Strategy Risk Scores for use by the Allocation Provider. This, in turn, dictates how the Smart Contracts will allocate and maintain the user their assets across the selected Strategies.
The Risk Appetite is a number between 0 (Risk Averse) and 10 (Risk Seeking).
A Smart Vault is a Smart Contract that combines Strategies, a Risk Model, Guards and Actions into a usable end-user product.
Creation and management of the "Smart Vault" contracts are user-controlled through a "no-code" User Interface.
In addition, the Smart Vaults are a routing system that allocate funds to and moves them between Strategies without locking them.
Address with administrative rights on Master Vault Level.
Proposals to the DAO to make changes and improvements to the Spool Ecosystem.
The SPOOL Ecosystem Token.
The creator of a Spool Smart Vault. Curious about how you can create your own Smart Vault? Navigate to Creating a Smart Vault.
Vault Owners can decide to incentivize their users with arbitrary tokens, setting reward emission amount and duration so the rewards tokens are emitted over a specific period.
SPOOL incentives are a core use-case of this mechanism, where the Spool DAO incentivizes certain Smart Vaults with their SPOOL Token.
SPOOL incentives for Smart Vaults are voted on using a custom UI component that integrates with Snapshot (An external explainer on SnapShot can be found here).
Users can distribute their voting power between vaults that reach the 1% of TVR threshold. The amount of incentives a vault receives is calculated based on the outcome of voting (for 50%) and the profit the vault made relative to other vaults (for 50%).
The resulting amounts are then passed to the Smart Vault to be issued as a reward to the investors utilizing that given Smart Vault.
Other incentives, as defined by the Vault Owners, can be in any ERC-20 Token and do not require voting through DAO governance.
General participant within the Spool Ecosystem.
These are adapters connecting the Spool ecosystem to a specific underlying Protocol. They handle the routing of deposits, withdrawals, and other communication with the external protocol.
Yield is generated on a Strategy Level by the External Protocol, see Understanding a Yield Generator.
For more information see Understanding a Strategy, Smart Vaults, and Vault Strategy Share Reallocation.
The SSTs or Strategy Share Tokens represent shares of the underlying assets locked in a particular strategy.
Each Strategy has an underlying asset used for deposits. Spool groups these assets into Supported Asset Groups (SAGs). On Smart Vault Creation, the Creator directly decides which strategies will be used, with the UI only allowing selection from those strategies with the same underlying tokens.
Spool Smart Vaults are non-custodial solutions and route assets rather than holding them.
The TVR metric measures the total value that was routed through the Spool Protocol to the underlying protocols. TVR is one of the key performance indicators for Spool protocol.
"Owner" of one or more Smart Vaults. The vault owner is entitled to a Management Fee and Performance Fees from users using their respective Smart Vault(s).
Such privileges (depending on the Smart Vault configuration) include:
- Withdrawing funds from a Smart Vault
- A Smart Vault Administrator cannot withdraw "other users" their funds to their own wallet.
- Removing Smart Vault Participants
Adding and removing administrators will require smart contract interaction and will be done via the user interface by a Vault Owner.
The Vault Sync step updates the Vault State after DHW is completed. Vault Sync runs automatically when the first user after DHW executes an action on the Smart Vault (deposits, withdraws, claims), but a Vault can also synchronized separately if needed.
As part of this, the Vault Sync:
Having the option of running DoHardWork (DHW) in an asynchronous manner and executing it separately for each of the Strategies leads to users receiving their receipt tokens gradually.
In order to ensure deterministic outcomes, all deposits are pooled at the Smart Vault level, pending a vault flush, before being sent to DHW for processing.
Simply put, a vault flush is a synchronization point and can be executed by any user, at which point the funds aggregated within a specific “vault flush” period are made available to DHW.
Please note, a Vault Flush can only occur if DoHardWork processes for the previous Flush are completed, preventing overlapping DHW Indexes.
Due to the market changes and protocol dynamics, the Vault-Strategy share allocations have to be periodically reallocated to correctly reflect the Smart Vault its Risk Assessment.
Reallocation adjusts capital allocation to maximize capital efficiency within the constraints of the parameters and Risk Appetite set by each individual Spool Smart Vault. This happens periodically depending on the gas prices and Smart Vault.
The Withdrawal NFT represents a pending withdrawal.
When a user requests a withdrawal from a Smart Vault, a W-NFT or a withdrawal NFT is minted as a Withdrawal Receipt.
After the next DoHardWork (DHW), the W-NFT can be burned in exchange for the withdrawn asset token it represents. Burning of the W-NFT burns also the wrapped Smart Vault Tokens (SVTs).
The voting token for the Spool Ecosystem.
Last modified 3mo ago