Overview

For liquidity providers

Liquidity providers (LPs) ensure the platform’s smooth operation by maintaining deep liquidity in Vaults. LPs are incentivised to maintain liquidity within Vaults, earning rewards through trading fees and DAO‑approved LP rebates.

Liquidity is supplied to the USDC ↔ vault token (ERC-20) pool created for each vault. You earn swap fees. You do not take custody of the underlying real world assets.

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How LPing on XVault works, in one view

[Vault token (ERC-20)]  ⇄  [USDC]  inside  [AMM pool]
           ↑                       ↑
        Traders                LPs add/remove
           ↓                       ↓
        Price = on-chain pool state, fees paid on each swap

• When a custodian deploys a vault, the protocol factory automatically creates a Uniswap-style AMM pool for USDC ↔ that vault’s token at a chosen fee tier. No custom setup is required.

• Liquidity can be added by the custodian, their community, or any external LP through standard interfaces and routers.

• Traders buy or sell vault tokens against your liquidity. You earn a share of trading fees proportional to your active liquidity.

• Fees accumulate in the pool position and can be collected by you at any time. Fees are not auto-compounded.

$XVAULT advantage: a liquidation backstop

Traditional AMM LPs face impermanent loss versus simply holding their two assets. In $XVAULT vaults, there is a structural backstop for LPs because the vault ultimately holds asset claim tokens for real world assets.

So, in an unlikely, extreme scenario where demand dries up and LPs end up holding all the vault tokens, the custodian can liquidate underlying assets according to the vault’s published sales policy. Proceeds are reflected on chain via EVEC and flow to current vault token holders pro rata. In that scenario, LPs receive their share through the vault’s distribution path, which can materially offset or eliminate the divergence that creates impermanent loss.

Important: This is not an unconditional guarantee. Execution price, timing, and policy constraints matter. Custodians are required to publish clear selling strategies and distribution policies for each vault. LPs should review these disclosures before providing liquidity and monitor updates over time.

What you need to know upfront

• Price formation is purely on chain. Spot price comes from the pool’s state. There is no external oracle.

• Initial price and fee tier are set at vault deployment. The custodian may publish guidance on expected trade sizes and target price impact.

• Current UI availability. There is no XVault quote screen yet. Use the Uniswap pool UI for price and depth. We are building a public price API. Custodians can request access to the beta.