Dynamic Vault Formulas

Dynamic Vault performs accounting in smallest token units using checked integer arithmetic. Display decimals are a UI concern. Division rounds down unless a strategy handler explicitly requests rounded-up collateral conversion.

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Core Values

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Locked Profit

Dynamic Vault uses a denominator of: $$\text{LOCKED\_PROFIT\_DEGRADATION\_DENOMINATOR} = 1{,}000{,}000{,}000{,}000$$ The default degradation rate fully unlocks locked profit over 6 hours: $$\text{defaultDegradation} = \left\lfloor \frac{1{,}000{,}000{,}000{,}000}{6 \times 3{,}600} \right\rfloor$$ For a current timestamp: $$\text{duration} = \text{currentTime} - \text{lastReport}$$ $$\text{lockedFundRatio} = \text{duration} \times \text{lockedProfitDegradation}$$ If lockedFundRatio is greater than the denominator, locked profit is zero. Otherwise: $$\text{lockedProfit} = \left\lfloor \frac{ \text{lastUpdatedLockedProfit} \times (1{,}000{,}000{,}000{,}000 - \text{lockedFundRatio}) }{ 1{,}000{,}000{,}000{,}000 } \right\rfloor$$

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Unlocked Amount

The unlocked amount is used for deposit and withdrawal share calculations. $$\text{unlockedAmount} = \text{totalAmount} - \text{lockedProfit}$$

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Deposit LP Tokens

For a non-empty LP supply: $$\text{lpTokensMinted} = \left\lfloor \frac{\text{depositAmount} \times \text{lpSupply}}{\text{unlockedAmount}} \right\rfloor$$ The program then increases total_amount by depositAmount. For zero LP supply, the program first adds the deposit to total_amount, then mints the current unlocked amount: $$\text{lpTokensMinted} = \text{unlockedAmountAfterDeposit}$$ This also covers the edge case where all LP tokens were previously burned but some profit remains locked.

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Withdrawal Amount

For a direct LP-token withdrawal: $$\text{withdrawAmount} = \left\lfloor \frac{\text{lpTokensBurned} \times \text{unlockedAmount}}{\text{lpSupply}} \right\rfloor$$ The program subtracts withdrawAmount from total_amount, transfers that amount from the token vault, and burns the user’s LP tokens. For strategy-backed direct withdrawals, the program may refine the LP amount if the strategy cannot return the full desired amount: $$\text{refinedLpBurn} = \left\lfloor \frac{\text{actualOutAmount} \times \text{lpSupply}}{\text{unlockedAmount}} \right\rfloor$$ Precision loss in this path must be at most 1.

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Strategy Total Amount Update

After a strategy action, the program updates vault total liquidity from before and after values: $$\text{newTotalAmount} = \text{oldTotalAmount} + \text{tokenVaultAfter} + \text{strategyLiquidityAfter} - \text{tokenVaultBefore} - \text{strategyLiquidityBefore}$$ Gain and loss are derived by comparing total amount before and after: $$\text{gain} = \max(\text{newTotalAmount} - \text{oldTotalAmount}, 0)$$ $$\text{loss} = \max(\text{oldTotalAmount} - \text{newTotalAmount}, 0)$$

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Locked Profit Update

The program first calculates remaining locked profit at the current timestamp. Loss reduces remaining locked profit first: $$\text{lockedAfterLoss} = \max(\text{remainingLockedProfit} - \text{loss}, 0)$$ Gain is then added: $$\text{newLockedProfit} = \text{lockedAfterLoss} + \text{gain}$$ last_report is updated to the current timestamp.

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Performance Fee

The performance-fee constants are: $$\text{PERFORMANCE\_FEE\_NUMERATOR} = 500$$ $$\text{PERFORMANCE\_FEE\_DENOMINATOR} = 10{,}000$$ So the fee is 5% of positive strategy gain: $$f = \left\lfloor \frac{\text{gain} \times 500}{10{,}000} \right\rfloor$$ The program does not transfer this fee as underlying tokens. It mints LP tokens to the configured fee vault. Let:

• p be the gain
• u be the unlocked amount before the rebalance accounting update
• s be lpSupply before fee minting
• f be the fee amount above

The amount of newly unlocked value attributed to the fee mint is: $$x = \left\lfloor \frac{f \times u}{p + u - f} \right\rfloor$$ The LP tokens minted to the fee vault are: $$\text{feeLpTokens} = \left\lfloor \frac{x \times s}{u} \right\rfloor$$ If fee LP tokens are minted, x is subtracted from last_updated_locked_profit. This keeps the virtual price stable at the moment the performance fee is minted, while future locked profit continues to unlock over time.