Protocol
Blades, wheels and maturity
Vane has three core objects: the blade, a fixed-term deposit; the wheel, the six slots that hold an address's blades; and the term, which sets when each blade matures. This page defines each of them, explains how interest accrues, and sets out the schedule on which blades mature.
Blades#
A blade is a fixed-term deposit of a stablecoin amount, its principal, locked for one term. It is owned by the address that deposited it, and everything it pays, at maturity or on a break, goes to that owner.
- Deposit asset. USD stablecoins. The supported list is announced at launch and is a governance parameter.
- Minimum size. A minimum blade size applies. It is announced at launch.
- One blade per slot. Each blade occupies one slot of its owner's wheel.
Blade states#
A blade is always in one of five states.
| State | Meaning |
|---|---|
| Locked | The term is running. Interest accrues but cannot be withdrawn. |
| Matured | The term has ended. Principal, net interest and allocations are claimable. The blade no longer accrues. |
| Withdrawn | The matured amount has been sent to the owner's wallet. The slot is free. |
| Rolled | The matured amount has become the principal of a new blade in the same slot. |
| Broken | The owner ended the blade before maturity. The principal was returned; interest and allocations were forfeited. |
The possible transitions are:
locked --> matured --> withdrawn
| |
| +------> rolled (new locked blade, same slot, new term)
|
+------> broken
Withdrawn, rolled and broken are final states for a blade. Rolling ends one blade and starts another.
Terms and protocol months#
A month is a protocol period of fixed length defined in the contracts. Its exact length in seconds will be published with the deployment. Terms and maturities are counted in these months, not in calendar months.
A term is six months. This is the initial value: term length is a governance parameter, and a change applies to new blades only. Existing blades keep the term they were opened with.
The wheel and its six slots#
A wheel is an address's set of six slots, one for each month of the term. Each slot holds at most one blade. You open one blade per month, and slot k is first used in month k.
Each slot then has a turn once per term. The blade opened in slot k in month k matures in month k + 6. In that month its owner can roll it into the same slot, or withdraw it, which frees the slot for that month's new blade. Because every slot comes round once per term and no two slots share a turn, a full wheel has exactly one maturity per month.
After an early break, the slot stays empty until its next turn: the month in which the broken blade would have matured. This keeps the wheel on its one-maturity-per-month schedule.
Filling the wheel#
During the first six months the wheel fills, one slot per month. In month 7 the first blade matures. The chart assumes every matured blade is rolled.
Month 1 2 3 4 5 6 7 8 9 10 11 12
Slot 1 O - - - - - M - - - - -
Slot 2 O - - - - - M - - - -
Slot 3 O - - - - - M - - -
Slot 4 O - - - - - M - -
Slot 5 O - - - - - M -
Slot 6 O - - - - - M
O blade opened - blade locked M blade matures and is rolled
The maturity schedule once the wheel is full#
From month 7 onwards, one blade matures every month.
| Month | Blade that matures | Opened in |
|---|---|---|
| 7 | Slot 1 | Month 1 |
| 8 | Slot 2 | Month 2 |
| 9 | Slot 3 | Month 3 |
| 10 | Slot 4 | Month 4 |
| 11 | Slot 5 | Month 5 |
| 12 | Slot 6 | Month 6 |
| 13 | Slot 1 | Month 7, if rolled |
In general, slot k matures in months k + 6, k + 12, k + 18 and so on, for as long as it is rolled.
How interest accrues#
Blades share the yield generated by the yield source on deposits. Over any interval, the yield produced is divided among the blades locked during that interval in proportion to their principal. Summed over a term, each blade's interest is therefore pro rata to its principal and the time it has been locked.
interest_i = Σ over intervals t of ( yield_t × principal_i / P_t )
yield_t yield generated by the yield source during interval t
principal_i principal of blade i if it is locked during t, otherwise 0
P_t total principal of all blades locked during t
With a constant rate this reduces to a familiar form. At an illustrative 5% annual rate, which is not a forecast, a blade of 1,000 stablecoin units accrues 1,000 × 0.05 × 6/12 = 25 over a six-month term. In practice the rate is variable, set by the venue, never fixed or guaranteed, and can be zero. How interest is measured will be published before launch.
Interest accrues over the term and is paid at maturity. Before maturity it is tracked but not withdrawable.
What a blade pays at maturity#
At the end of the term, the following becomes claimable:
claimable at maturity = principal
+ interest − protocol fee
+ redistribution allocations
Protocol fee on interest#
The protocol fee is taken on interest only, never on principal, and is applied when interest is paid at maturity. Its level is announced at launch and is a governance parameter. Fee proceeds fund buy-and-burn of $VANE.
Redistribution allocations#
While locked, a blade can receive allocations from other blades' early breaks. They are recorded on the blade and paid only at its maturity. If the blade is itself broken, its allocations are forfeited and redistributed again. See How forfeited interest is shared.
What the owner can do with a matured blade is covered in Rolling and withdrawing.