Defining Vaults

A vault is a curated pool of similar real world assets, created and monitored by a specific custodian. It only admits asset claim tokens (ERC-721) that satisfy its published criteria. In return, the depositor receives a vault token (ERC-20). The vault token (ERC-20) is fungible and is what traders buy, hold, and sell.

Components

An Asset Claim Token (ERC-721) is a non-fungible token that represents a claim to a specific asset you purchased. Rights become active after KYC and contract completion. It can be burned only if payment fails, is reversed, or a similar settlement error occurs. It may be deposited into a vault to receive vault tokens (ERC-20). Failing KYC does not burn it, it simply carries no rights until checks are complete.

A Vault Token (ERC-20) is a fungible token that represents your share of a vault. This is what you buy, hold, and sell. It is priced by the vault’s liquidity pool rather than a fixed NAV. When assets inside the vault exit or pay yield, you receive EVEC pro rata based on your vault token (ERC-20) balance. Depositing an asset claim token (ERC-721) to obtain vault tokens (ERC-20) is one way, you exit by selling vault tokens (ERC-20) in the pool.

Eligibility

When creating a vault, the custodian publishes its' characteristics: what it accepts, for example category, provenance evidence, documentation standards, condition bands, and issuance limits. The app surfaces this on the vault page before you deposit or trade.

Let's take an example of a vault consisting of luxury watches:

• Accepts: modern and vintage mechanical watches from named brands with verifiable serials, original papers or third party authentication, condition grades A to B, and insurance photos at intake.

• Rejects: counterfeits, altered or missing serials, severe damage that breaks the category rules.

• Deposit path: asset claim token (ERC-721) minted at purchase, verification completed, deposit into the Watches vault, vault tokens (ERC-20) minted to you.

• A 10 percent seeding allocation of new issuance goes to the custodian to help fund liquidity.

Pricing

There is no fixed NAV. Price is discovered continuously in a liquidity pool that holds reserves and quotes a price to buyers and sellers at all times. Supply and demand, and your order size, drive price moves.

Events

When an asset inside the vault is sold or pays yield, the protocol mints a fungible exit coupon called EVEC to the vault, then distributes it to vault token (ERC-20) holders pro rata.