3Pool Convex Meta Vault

How this strategy works.

Strategy

The strategy of the first Meta Vault uses Curve and Convex protocols as yield sources. USDC is the asset to enter and exit the contract. The USDC is then deposited into the 3Pool token, which itself is split up into three Basic Vaults.

The Basic Vaults are wrapper contracts around Curve 3Pool Metapools and Convex.

A liquidator contract is used that liquidates the earned rewards in the form of CRV and CVX tokens, and deposits them back into the Basic Vaults to increase the overall value for its depositors.

The Meta Vault uses mUSD, BUSD and FRAX as the first set of Metapools assets that are paired with the 3Pool.

Strategy overview

Functionality Details

At the top level, the USDC asset is deposited into the Meta Vault and then invested in Curve’s 3Pool. The 3Pool LP token (3Crv) is then invested in an underlying 3Pool-based (3Crv) Meta Vault, which is another ERC-4626 vault with Curve’s 3Pool liquidity provider token (3Crv) as an asset.

The 3Crv is invested in underlying multiple Convex 3Crv Basic Vaults based on weights set by the VaultManager. Withdraw of assets (3Crv) are first retrieved from the Cache, then from a Vault that is set as the L2 cache, and lastly proportionally withdrawn from the underlying assets. This may not match the weights set by the Vault Manager.

Fees

The Meta Vault charges a 4% performance fee on any underlying asset appreciation on a weekly basis. As an example, if the underlying assets per share increased by 0.1% in the last week, the vault shares will be increased by 0.004% as a fee. If there was 100,000 vault shares, 4 vault shares will be minted as a performance fee. This dilutes the assets per shares of the existing vault shareholders by 0.004%. No performance fee is charged if the assets per share drops.

The underlying vaults charge a 16% fee upon liquidation of the earned rewards from the Convex pool. That is, the CRV and CVX rewards.