The goal of Meteora Dynamic vaults is to solve the key challenges of optimizing funds for yield generation while keeping funds safe and accessible for users and protocols alike. In this section, we will discuss the design goals of our vaults.

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Security and Safety of Principals

  • Principals are always safe: Funds can only be deposited into trusted and decentralized protocols for yield generation.
  • Separation of concerns: The keeper program only contains logic to find optimal yield allocations and to limit fund flows from the vaults to the protocols. It cannot access or claim principals.
  • Decentralized governance: We aim to upgrade authority for decisions around lending protocol integrations and allocations to a decentralized Autonomous Organization (DAO).

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Full Liquidity at All Times

  • Instant access: Deposited assets remain liquid and accessible at all times, allowing users to withdraw funds at will.
  • Liquidity checks: The vault’s total deposit amount is always checked against the reserves left in the lending platform.
  • Automatic withdrawals: If the liquidity reserve in a pool drops below a predetermined threshold, the vault will withdraw from the pool to ensure sufficient liquidity for user withdrawals.

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Optimized Yield Returns

  • Dynamic allocation: The vault program monitors and calculates yield variations across all connected lending platforms, dynamically allocating and rebalancing assets to those with the highest returns.
  • APR awareness: The annual percentage rate (APR) of a lending pool depends on factors such as borrowing amount, deposit amount, and the interest rate model. Deposit APR decreases as more is deposited, since borrowing interest is shared among depositors.
  • Optimal allocation algorithm: The algorithm must compare and find the best APR among platforms for a given deposit sum.

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Ease of Integration and Usage

  • User-friendly design: Vaults and SDKs are designed to be straightforward and easy for any user or protocol to utilize and build applications on top of.
  • Comprehensive resources: We provide full guides, code examples, and an API to help anyone connect to the vaults and access all integrated lending reserves.
  • Ecosystem vision: Our goal is to make the vaults the yield infrastructure for all of Solana.

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Event Monitoring and Tracking

  • Continuous monitoring: Lending pool APY, utilization rates, and reserve levels are continuously monitored for better yield opportunities and risk management.
  • On-chain advantages: Solana’s composability, speed, and low transaction fees enable on-chain event monitoring that surpasses other blockchains, helping us achieve these design principles.