Spool V2 Actions — Enhancing Smart Vault composability
Introduction to Actions in Spool V2
Spool V2 is a comprehensive solution for institutions looking to create DeFi investment products that cater to the specific needs of their clients. With the introduction of Guards in our previous article, Spool V2 enables institutions to have more control over who can invest in their Smart Vaults.
To further enhance the functionality of Smart Vaults, Spool V2 introduces Actions. These customisable actions can be tied to users’ activities, such as depositing into or withdrawing from a Smart Vault, providing a more adaptable and efficient experience for both the Vault Creators and the investors.
Understanding Actions
Actions are a set of predefined but customisable actions that can be linked to user activities like deposits and withdrawals in a Smart Vault. These Actions are selected and configured during the Smart Vault creation process and can utilise data associated with the action or call functions of external contracts.
This creates a process for institutions to create models familiar to them from the traditional financial world.
Sample Actions
Some pre-set Actions will be available with the launch of V2; however, these are far from all that is available. Just as with Guards, our team will be happy to help you configure custom Actions for the launch of your own investment products using Smart Vaults.
Charging a fee when depositing
Fees for entry are a standard part of the TradFi ecosystem, enabling Smart Vault creators to see a clear initial ROI for setting up the Smart Vault, as well as giving them funds to offer services such as rewards to investors or purchase $SPOOL to take part in the Governance Voting through the Spool DAO.
Paying an insurance fee when depositing
Insurance is an increasing aspect of both the DeFi and the web3 ecosystem. While Spool V2 natively creates a diversified portfolio model with risk management and automated protection, “black swan” events that affect the wider DeFi ecosystem can still negatively affect the value of a Smart Vault portfolio. By offering an insurance model which automatically collects a fee during deposit, DeFi product creators can add another layer of security and reassurance for their investors.
Automated Asset Swaps
This is a key feature and benefit for Spool V2 Smart Vault products, that improves the process of investing for holders of various cryptocurrencies.
Previously, when investing directly into most DeFi yield farms, an investor would have to manually exchange their currently held tokens for ones of the correct type relative to the Yield Farm.
This can be a complicated process of not only identifying where a currently held token can be exchanged for the correct type, but also linking wallets to DEXs, or signing up to centralised exchanges to do so. In turn, this increases the scope of both user error and scams/attacks on a user’s assets.
Spool V2 removes this complex process by swapping tokens automatically during deposit, into the correct type for the strategies within the Smart Vault. This decreases the hurdles to investment and removes one of the key challenges currently found in the DeFi Yield investment ecosystem.
Paying an early-withdrawal penalty
With the new “Time lock” Guard, Smart Vault creators now have the option to set minimum investment periods for deposits into their Vaults.
While this does add a level of financial security and management for the creators, they may wish to allow investors the ability to remove funds earlier than planned.
Early-withdrawal penalties give Smart Vault creators the ability to let investors leave early but still maintain a level of financial control and long-term strategic planning for the Vault products they have created.
Notes
As with Guards, there are restrictions around how and which Actions can be configured for a specific Smart Vault. In particular, as the process of managing funds within a Vault is fully automated and handled by Smart Contracts, it can proceed without human intervention.
Once a Smart Vault is created, the set of Actions and Guards configured for the Vault cannot be altered. This ensures clarity for the investors about exactly what they are investing in and prevents issues with Vaults ending up “locked” due to conflicting requirements.
To ensure the smooth functioning of the Vault, additional off-chain and on-chain validations will be necessary to prevent the combination of Actions and guards that could incapacitate the Vault on creation.
In particular, this applies to new Actions which could create conflicting situations with existing functions.
Conclusion
The introduction of Actions in Spool V2 Smart Vaults further enhances the flexibility and control that institutions have when creating DeFi investment products.
By allowing Vault Creators to customise Actions based on user activities, Spool V2 ensures that institutions can quickly, easily, and securely create products that cater to their clients’ needs and requirements, all while maintaining legal compliance.
To learn more about Spool V2 and how Actions can benefit your institution, visit enterprise.spool.fi and schedule a call with our team.
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Spool is a permissionless DeFi platform that connects Capital Aggregators with DeFi Yield Generators. Funds are dynamically and efficiently allocated to ensure optimized yields, for custom strategies, managed by DAO-curated Risk Models.
Spool was established as a DAO, with a selection of founding contributors representing a diverse cross-section of the blockchain community.
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