PrimeVaults

Prime Vaults is an on-chain savings protocol built for predictable yield and principal protection. It abstracts complex DeFi strategy routing into a simple vault experience while keeping the system verifiable: depositors can continuously see where assets are deployed, how risk is managed, and how yield is produced.

Designed around a risk-managed, savings-first thesis, Prime Vaults treats capital allocation as a disciplined process: transparent, constraint-driven, and built to protect depositors. 

The Problem

DeFi yield is often optimized for maximum APY with limited transparency, fragmented strategies, and unclear solvency postures. Users are frequently asked to trust allocations they cannot verify, and risk is discovered after market stress, not before. For a savings product, this trust model is backwards.

The Solution

Prime Vaults addresses this by making savings verifiable and risk-managed by design through three core pillars:

Predictable Yield: Curated strategies under strict on-chain constraints.

Guaranteed Minimum Yield (GMY): A framework benchmarked to the Aave v3 supply rate.

On-Chain Transparency: Proof-of-Reserves, live allocations, and a real-time Solvency Health Index.

Key Innovations

1. Guaranteed Minimum Yield (GMY)

Prime Vaults ensures depositor returns stay at or above the Aave v3 supply-rate benchmark.

Mechanism: The protocol uses a buffer approach funded by protocol-earned ROI and rebates to support vault returns during weaker yield conditions, ensuring performance does not fall below the Aave baseline.

Outcome: Users receive a reliable floor that behaves like a "risk-free" reference rate for on-chain savings.

2. Unified Yield Model

Prime Vaults aggregates capital under a unified allocation framework rather than isolated silo vaults. This allows the protocol to route liquidity across curated strategies as a single portfolio with explicit constraints.

Efficiency: Improving capital efficiency by coordinating moves across the entire portfolio.

Risk Reduction: Reducing concentration risk by preventing over-exposure to a single venue.

Liquidity: Keeping capital "withdrawal-ready" by maintaining a global view of liquidity depth.

3. Solvency Framework & Health Index (HI)

At the center of our framework is the Health Index, a real-time solvency metric reflecting the protocol’s ability to honor all user liabilities.

Formula: $HI = {Total Value of Assets}/{Total Value of Liabilities}

Protocol Assets: Includes all capital across Staking Vaults, Treasury, IL Reserve Fund, and active Strategy Vaults.

Liabilities: Includes {Total Deposited} + {Total Rewards Accrued}

Outcome: The HI drives risk responses, informs reserve accumulation, and provides an externally monitorable view of system solvency.

Health Index (HI) Risk Mitigation with Automated Circuit Breakers

• HI ≥ 1.0: No action required.

• 0.95 ≤ HI < 0.99: Reduce circuit breaker thresholds for LP pools from 0.2% to 0.1%; notify curator for constant monitoring. Maintenance at this level is classified as above the risk-managed operations level.

• 0.90 ≤ HI < 0.94: Increase IL (Impermanent Loss) fund allocation from 10% to 20% (currently a manual process, with automation planned for the future) and exit all LP positions.

• HI < 0.90: Liquidate and withdraw all positions across all strategies; trigger internal audit/review procedures.
  
  The Proof-of-Reserves dashboard is updated in real-time and is always verifiable on-chain.

4. Impermanent Loss Reserve Fund (ILRF)

A dedicated fund designed to absorb IL shocks from liquidity provisioning.

Growth: A portion of strategy yield (10–20%) is allocated here based on Health Index conditions.

Function: Offsets liquidity discrepancies and protects user principal from LP-related losses during market cycles.

Technical Details

Blockchains: Arbitrum, Berachain

Core Assets: WETH, WBTC, USDC, WBERA

Smart Contracts: Solidity (ERC-4626 compliant).

Strategy Layer: Modular manager with allowlists, exposure caps, and allocation constraints.

Safety Modules: Circuit breakers for price deviations and concentration limits to reduce "blast radius."

Transparency Layer: On-chain Proof of Reserves (PoR) and indexed dashboards for real-time auditing.

Conclusion

Prime Vaults makes on-chain savings legible. Instead of asking users to "trust the strategy," the protocol publishes the information required to verify solvency and monitor risk. For DAO treasuries and long-term holders, Prime Vaults provides an institutional-grade posture in a simple, verifiable vault interface.

Links & Resources

Live Deployment: https://app.primevaults.finance/

GitHub Repository: https://github.com/prime-vaults

Proof of Reserves: https://app.primevaults.finance/proof-of-reserves

IL Reserve Fund: https://arbiscan.io/address/0x05Cb42e614577B663c7B622894724E0e1348aE3c

Contract Registry: https://arbiscan.io/address/0xb2f865041e3F7De4576FB5B30ac8e9fbDA82e29d