Vaults are investment instruments that employ a specific set of strategies for yield farming. They make use of automation to continually invest and reinvest deposited funds, which help to achieve high levels of compounded interest. Vaults are the core of the Missile Farm ecosystem. In a Missile Farm vault, you earn more of the asset you stake in it regardless if this is an liquidity pool (LP) token or a single asset. For example, vaults where one can stake BTC-BNB LP will result in more BTC-BNB LP over time, effectively growing your share in the vault and thus allowing for more and more rewards over time.
Despite the name 'Vault' suggests, user funds are never locked in any vault on Missile Farm. One could always withdraw from a vault at any moment in time. Missile Farm also does not own user funds staked in vaults. However, it is generally best to view vaults as investment tools to store funds for the medium to long term in order to have the effects of compounding really kick in.
When browsing the vaults on the platform, you will see the annual percentage yield (APY), which takes the frequent compounding into consideration compared to annual percentage rate (APR) which does not. You will also see daily interest percentages and the total amount invested in a vault by all users (TVL). Furthermore, one can see what underlying platform the vault is using as a source of revenue.
Each vault can either refer to a pair of tokens invested in liquidity pools, such as CAKE-BNB LP tokens within the Binance Smart Chain ecosystem, or a single token invested in lending platforms or single stake reward pools. After depositing tokens to a vault, the user is supplied with vault specific MSI which represent their share in the vault. We will elaborate on MSI in the next section.
Anyone in the Community can work together to build new strategies and submit them to governance for voting. We look at vault requests via our official forum where anyone is free to submit vault requests.
Summarizing, vaults can:
Efficiently execute yield farming strategies.
Compound rewards into the initially deposited token amount.
Use any asset as liquidity.
Provide one asset as collateral for another.
Manage collateral at a safe level to mitigate liquidation.
Put any asset to work to generate a yield.
Reinvest earned profits.
Vaults are normally harvested multiple times daily and profits are automatically reinvested (compounded). Larger vaults, such as our BSC $CAKE vault, are harvested even more frequently.
They could, but vaults help you save on personal time and transaction fees, maintain healthy collateral to debt ratios, self-optimize for the best possible yields, and automatically reinvest earnings. Attempting to do this manually would result in large inefficiencies. At Missile Farm we like to say: "Do Less. Earn more!"
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Yes. Our displayed APY values reflect the predicted rate earned on a vault in a year. This rate is determined by the underlying platform it uses, the strategy that it is interacting with at the time, the total amount of funds in the vault and also takes into account the effect of compounding. As a unique feature, we have also included all vault fees in the APY calculation. What you see is what you get!
Missile Farm vaults are audited, but this does not mean that a vault is entirely risk free. Below are some of the general vault risks:
Assets deposited into the vault have no risk of decreasing in quantity but can decrease in monetary value.
As with any smart contract, the ultimate risk is that an investor's funds can end up stolen or unable to be withdrawn. The team does take steps to quantify the security risks of smart contracts and only will interact with ones that meet a specific set of requirements after excessive testing to make sure the underlying platform does not contain so called 'rug-pull' functions.
Money Market : Utilizes lending platforms, such as Venus on BSC, to generate the highest possible yield for these coins (e.g. BUSD, BNB, LINK, DOT, DAI, USDT, ETH, or BTCB).
Native Token Farming : Takes advantage of the high yield on popular farms by depositing another asset to earn, sell and compound profits of the native reward token.
You will always withdraw the token type that you deposited, because at Missile Farm you earn what you stake. You will get the amount you deposited plus the yield generated minus the vault withdrawal fees.
Liquidity pool (LP) vaults work by reinvesting the fees awarded to LP participants. In return for providing liquidity to the pool, many platforms reward investors with tokens. Our vaults regularly harvest these rewards, sell it, buy more of the LP’s underlying assets, and then reinvest to complete the cycle.
This compounds the rewards gained from a liquidity pool. Missile Farm creates strategies that automate this process, saving you time and gas fees in comparison to farming manually. This is all done for a tiny fee that is distributed back to those how stake in Missile Farm's governance pool. A small percentage also goes to the Missile Farm treasury.
Pending rewards are not reflected in the balance until they are swapped for the initial deposited token. This can vary depending on the strategy running.
New potential vaults can be discussed in our Discord in the #whiteboard channel. Our strategists then add the potential investment strategy to our strategy list. A priority is assigned to each new, potential strategy based on its APY, TVL and sustainability. Our developers/strategists then attack the list from top priority to bottom. The official forum is used for submitting actual vault requests.