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 a 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 frequent compounding into consideration compared to the 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.