How a Spool Smart Vault is Created
For the Fintechs, the Institutions and all DeFi Yield Seekers, Spool moves into the next phase, offering customizable exposure to DeFi.
The Spool Smart Vault is an instrument to unlock our innovative new approach to DeFi yield farming. Complex entry to DeFi is a thing of the past as Spool empowers customizable earning. Simply join an existing Smart Vault — or create your own — to access advanced yield farming strategies with just a few clicks.
- Create custom Smart Vaults tailored to a specific risk appetite
- Once deposited, pay zero gas fees as the deposits are auto-rebalanced and managed across DeFi protocols
- Spool Creators profit from others investing in their Smart Vault through the performance fee
- Diversify DeFi yield farming to optimize returns while controlling risk
Whether users are private investors, DAOs, influencers, crypto platforms, or a FinTech, Spool offers a cutting-edge method to get the most out of DeFi.
How to create a Smart Vault
In order to benefit from a diversified earning portfolio with Spool, users can either select from predefined Smart Vaults or create their own Smart Vault, tailored to their personal risk tolerance. This article goes through a simple step-by-step process of creating a Spool Smart Vault.
Connect to the Spool App
Create a Smart Vault in just 5 simple steps. Firstly, Spool Creators open the Spool App and connect their wallet. We support several popular wallet types, including Metamask, WalletConnect, Trezor, Coinbase Wallet, Ledger, Portis, Torus, and Formatic.
Next, they select the “Create a Spool” tab in the Spool App. This will take them to the “Spool Asset” page, where they will see the stablecoins available for yield generation. They are now ready to create their first Smart Vault.
STEP 1
The Spool Creators select the deposit currency they wish to use to generate a yield from the options listed and click “Next”.
Currently, Spool supports the stablecoins USDC, DAI, and USDT on the Ethereum network.
STEP 2
The Spool Creator will then be asked to select a “Risk Model” for their Smart Vault. They select the model that fits their favored analysis method and clicks “Next”.
Risk Models are quantitative methods of assessing DeFi protocol risks and are vetted by the Spool DAO.
The first Risk Model available is the Spool Labs Risk Model, which assesses the annual percentage yield (APY), the total value of tokens locked into a protocol (TVL), the length of time it has been deployed, the audits it has commissioned, whether a platform has launched bug bounty programs and the depth and integrity of its smart contracts. You can learn more about Spool’s Risk Models here.
STEP 3
In the strategies section, Spool Creators can select which DeFi strategies they wish to include in their Smart Vault. They have to choose at least one strategy to move on to the next step. The level of diversification of the Smart Vault is shown by the diversification indicator below the options.
STEP 4
Next, the Spool Creator can alter the overall risk appetite of their Smart Vault by adjusting the slider. Adjust the slider to find the perfect balance between projected APY and risk appetite.
Risk appetite is ranked from 1 to 10, with 1 being the least risky, 5 equally distributed risk, and 10 being the riskiest.
Below the risk bar, Spool Creators will see the estimated allocation of funds based on their selection. By changing the risk appetite, Spool Creators will see the distribution of each strategy update. As they increase their risk appetite, Spool reallocates a percentage of funds to riskier strategies from less risky strategies and vice versa.
STEP 5
The last step requires Spool Creators to name their Smart Vault and decide on their performance fee. Once they have done this, they can click “Create Spool”, and their Smart Vault will go live.
The performance fee is the percentage of profit Smart Vault creators will receive if other investors use their Smart Vault, based on the Vault’s returns. Spool Creators can see the summary of their Smart Vault on this page to ensure they are happy with the mix of strategies, risk appetite, performance fee, and estimated return.
Once a Spool Creator has created their “Smart Vault”, they can find it on the “Join a Spool” tab, where they can deposit funds to start earning based on the custom criteria they set up. The Smart Vault will now automatically rebalance and compound the generated yield in order to maintain the defined risk appetite ensuring their investments track market conditions without any human intervention.
Spool Smart Vaults remove the frustrations and costs associated with complex DeFi strategies by eliminating gas fees. The Spool Buffer System aggregates withdrawals and deposits to mitigate the impact of gas fees within high-volume re-balancing transactions. Deposits and withdrawals are matched within our backend infrastructure to split gas fees throughout the ecosystem, reducing capital inefficiencies.
On the Road Ahead
Spool’s future is chain agnostic, so Spool creators can leverage yield wherever their tokens are allowlisted in a Spool strategy. New strategies shall be added in the future based on the ongoing assessment of the risk profile of DeFi protocols by Spool DAO. For more information on the upcoming strategies or to suggest the next addition contact our Business Development team:
Simon Schaber — Chief Business Development Officer
Email: Simon@spool.fi
Telegram: @cynn01
Phone: +43 67762044091
Priscila Iwakawa — Head of American Markets
Email: Priscila@spool.fi
Telegram: @PayPri
Phone: +1 4075795310
Joshua Bate — Head of DeFi Markets
Email: Joshua@Spool.fi
Telegram: @JBate7
Phone: +44 7570 074235
Explore Spool Smart Vaults here.
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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.
Stay tuned as we shine a spotlight onto more Spool Team members over the coming weeks.
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