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Private Automated Vault
Only xALPACA holders will be able to invest in the high-leverage (>4x) vaults. The max amount a user can invest in all high-leverage pools will correspond to the xALPACA balance they have.
We employ linear & dynamic allocation quota where $1.0 worth of ALPACA locked for $1 allocation as described below:
Linear: the more xALPACA you hold, the higher allocation you get
Example:
2 xALPACA = $1 total allocation across all high-leverage vaults.
  • Example: Alice has 10,000 xALPACA, she is entitled to invest up to $5,000 USD across all high-leverage vaults.
  • For clarity, this means that Alice, for example, can invest $2,000 in on high-leverage vault, $500 in another vault, and $2,500 in another vault etc. But overall when all her investments across all the high-leverage vaults are summed up, they cannot exceed $5,000.
  • The allocation is counted against the current value of the investment and not the cost-basis. So as the investment appreciates in value, it takes up additional allocation.
Dynamic: ratio will be adjusted monthly based on ALPACA price.
  • Example: current ratio is 2xALPACA = $1 allocation. ALPACA price increases by 100%, the new ratio becomes 1xALPACA = $1 allocation, maintaining a constant $ ratio allocation.
Current Allocation Ratio
3.1 xALPACA = $1 allocation in high-leverage vaults

Other Implementation Notes:

  • The allocation refers to equity value. So $1 allocation means you can supply $1 worth of asset to have $8 TVL in the vault (for 8x vault)
  • We will track the amount invested in each vault’s smart contract (and not # of share token in the wallet.) So users cannot game the system by transferring the token out of their wallets to gain additional allocation.
  • xALPACA balance will be determined in real-time, on-chain, at the time of the investment
  • If your xALPACA balance falls below the allocation allowed AFTER the investment, your fund will still be allowed in the vault, however to make any additional deposits, you must increase your xALPACA balance
  • Dynamic ratio, adjusted on a monthly basis at the beginning of each month. To prevent manipulation, we will use TWAP of ALPACA for the 1 week prior to the ratio adjustment