How the Vault Works
Shares, NAV, yield accrual, and why the share model is fair to everyone in the vault.
The share model
When you deposit USDC into Aquifer, the vault does not simply hold your coins in a named bucket. Instead, it mints shares representing your proportional ownership of the entire vault.
Think of it like a fund. If the vault holds 10,000 USDC and has issued 10,000 shares, each share is worth exactly 1 USDC. If you deposit 500 USDC, you receive 500 shares. You now own 5% of the vault.
As the vault earns yield, the total assets grow but the total shares stay the same. Each share becomes worth more USDC. This is how you earn without doing anything: your shares do not change, but their redemption value does.
The share price formula
share_price = totalAssets / totalSharesWhen you deposit:
shares_minted = deposit_amount * totalShares / totalAssetsWhen you withdraw:
usdc_returned = shares_burned * totalAssets / totalSharesIf you are the first depositor and the vault has no shares yet, the formula simplifies to 1 share per 1 USDC. Early depositors set the initial price.
Why this model is fair
Every depositor interacts with the same share price at the time of their transaction. Nobody gets a better or worse deal based on when they enter or leave. The AI can rebalance freely without affecting the fairness of any individual position.
A depositor who joined early at a low share price and a depositor who joined later at a higher share price both see the same percentage gain from that point forward. The share price is the single source of truth.
Where yield comes from
The vault deploys capital to DeFi lending protocols. Those protocols pay interest to lenders. The agent periodically collects this yield and injects it back into the vault as additional USDC.
When yield is injected, totalAssets increases. totalShares does not change. Every existing share becomes worth slightly more. All depositors benefit proportionally.
Reserves vs deployed capital
The vault holds USDC in two places:
Reserves: USDC sitting in the vault contract itself, not deployed anywhere. Available for instant withdrawal.
Adapters: USDC deployed to external protocols via adapter contracts. Earning yield but not instantly liquid.
The Capital Deployed stat on the Markets page shows what percentage of the vault is currently deployed to adapters vs sitting in reserves.