Project W - Reverse Vault System

Vault systems based on Ethereum are opening in normal cases collateralized debt positions to mint tokens and liquidize these to finance the earning of vaults. These are controlled based on smart contracts and programs, so that process is automated. Easily speaking, you are depositing your assets into a robot with an effective yield farming strategy.

Understanding the Strategy of Vaults

Vaults are using part of the deposited assets to invest them into projects like Maker DAO, where they can mint tokens, which are then also deposited again into other vaults. Leveraging different kinds of financial products and minted tokens are used to buy more of the deposited assets, which are also deposited again into other vaults.

TL;DR : In most cases volatile ETH is used as collateral to mint stable coins, which are used again for yield farming, where the results are again used for yield farming, and so on.

Reversing the yield farming process

Project W's reverse vault system based on the idea to start the yield farming not after depositing the assets into the vault but already at the moment where wrapped tokens enter the ecosystem of the DeFi Blockchain.

As an example, we will use Token $A and wrap it into the Tron Blockchain as $wA. As soon as token $A is swapped, Project A will start to use this Token to mint more of token $A. There will be a reserve of 10% from the swapped Token to keep the Swap mechanism running, but the rest of the tokens will be invested into different financial projects or POS mechanism to mint more of $A.

Newly minted $A will be used for the Vault earning Pool and be transferred directly as $wA Tokens. Actual minted $A tokens will be put back to the investment pool to incrementally increase the ROI over time.

This strategy can ensure that Project W can leverage assets already in the stage of wrapping and swapping a token and ensure a constant stream of interests.

Channels

Main Steemit Blog: https://steemit.com/@projectw
Medium Blog: https://medium.com/@projectw
Twitter: https://twitter.com/Projectw_io