Tutorial

Ember Vaults are structured yield products that let users deposit assets into a vault and receive receipt tokens (shares) in return. The vaults are designed to support simple-click deposits, for the best-in-class single-asset yields curated by leading risk managers.

The flow to deposit assets is the following:

• Go to https://ember.so/ or https://trade.bluefin.io/ember

• Click on any vault you want to deposit into

• Make sure you have the required collateral for the vault (the deposit token)

• Click Deposit into Vault to input the desired amount, initiate and confirm the transaction.

• And that's it! You'll be able to see your shares of the vault in the form of your receipt tokens either in your wallet or on the Positions tab in the UI.

Yield Generation through your vault shares

Overall, the yield accrual is all based on the receipt tokens (Share Price of the vault).

• Deposits: When a user deposits a supported token (the deposit coin), the vault mints a corresponding amount of receipt coins. Initially, the exchange rate between deposit and receipt coins is 1:1. For example, depositing 100 USDC into a new vault would mint 100 eUSDC (receipt tokens) back to the user.

• Yield Accrual: Vault curators deploy the pooled deposits into various yield-generating strategies (DeFi protocols, liquidity provisioning, etc.). As the vault generates yield, the total value of assets in the vault grows. Instead of the receipt coin balance increasing, the exchange rate between receipt coins and deposit coins rises over time.

  Example:

  • At time of deposit: 1 receipt token = 1 deposit coin

  • After strategies earn yield: 1 receipt token = 1.05 deposit coins

  This design means users do not need to actively claim yield. Their receipt coins become progressively more valuable as the vault grows.

• Redemptions: To withdraw, users redeem their receipt tokens back to the vault. Based on the current exchange rate, they receive more deposit coins than they initially deposited. For example, redeeming 100 receipt tokens after growth may return 105 USDC.

Composability of your receipt tokens

Once a user has his shares, he can also supply them on Lending markets for composable yield generation. At this moment, the shares will stop showing on the user's Positions tab in the Vaults UI since they are deployed in another protocol. However, the Yield generation is still happening on both the receipt tokens (since their share price is increasing) and the Lending platform.