Smart Contract Architecture

Security is a core attribute. NUVA leverages the highest standards, leveraging industry best practices and undergoing rigorous audits by leading security firms.

• How the vault contract receives, holds, and manages deposits

  • Deposit flow

    • When a user deposits USDC into a vault:

      • User approves the vault contract to spend their USDC

      • User initiates a deposit transaction specifying the amount and vault

      • The vault contract receives the USDC and verifies the transaction

      • The vault contract records the deposit and calculates the vault token amount to mint

      • Vault tokens are minted and transferred to the user's wallet
        
        

  • Asset holding mechanis

    • The vault contract holds all deposited USDC in its own smart contract address on Ethereum Mainnet. The contract maintains an internal ledger tracking:

      • Total USDC deposited

      • USDC allocated to underlying assets (e.g., YLDS or HELOC tokens)

      • Total vault token supply

      • User balances (tracked by ERC-20 standard
        
        

  • Management and rebalancing

    • The vault contract includes administrative functions for:

      • Rebalancing vault allocations between assets

      • Processing yield distributions

      • Managing vault parameters (fees, limits, etc.)

  • Administrative functions are controlled by authorized multisig wallets to prevent single-point-of-failure vulnerabilities.
    
    

• Vault token minting mechanics (ERC-20 standard)

  • Minting process

    • When USDC is deposited, vault tokens are minted according to the formula:

      • Vault Tokens Minted = (USDC Deposited / Vault Token Price)

    • The vault token price is calculated as:

      • Vault Token Price = Total Underlying Assets / Total Vault Tokens Outstanding

  • Initial vault token price

    • When a vault is first created, the initial vault token price is set to $1. Early depositors receive vault tokens at a 1:1 ratio with USDC deposited.

  • Token price appreciation with yield

    • As yield accrues in the vault, the total underlying assets increase. Since the vault token supply remains constant (no new tokens are minted), the price per vault token increases. This is how yield is reflected in vault token appreciation.

    • Example of token price appreciation

      • User deposits $10,000 USDC into nuYLDS

      • Receives 10,000 nuYLDS tokens (at $1 price)

      • After one year with 4% yield, vault has $10,400

      • If total vault supply is still 10,000 tokens, new price = $1.04

      • User's 10,000 tokens are now worth $10,400

      • User earned $400 in yield without receiving new tokens

  • ERC-20 compliance

    • Vault tokens follow the ERC-20 standard, which means:

      • They can be transferred between wallets

      • They can be traded on DEXs

      • They are compatible with all Ethereum wallets

      • Standard token functions (transfer, approve, balanceOf) apply
        
        

• How yield accrues and compounds on-chain

  • Continuous accrual mechanism

    • Yield is accrued continuously as underlying assets generate returns. The vault contract tracks yield in real-time:

      • Underlying assets (YLDS, HELOC tokens) generate yield

      • Yield is paid into the vault contract

      • Total vault assets increase

      • Vault token price increases (without minting new tokens)

  • Compounding mechanics

    • Yield compounds automatically because:

      • As vault assets increase, the vault token price increases

      • The higher token price means subsequent yield is earned on a larger base

      • This creates compounding returns without additional user action

    • Example of compounding (1 year, $100k initial deposit):
      
      

    Strategy	Final amount	Extra earned
    6% simple interest	$106,000	—
    6% compounded monthly	$106,168	+$168
    6% compounded continuously	$106,184	+$184

  • On-chain verification

    • All yield accrual is recorded on-chain and verifiable. You can:

      • Check the vault contract on Etherscan to see total assets

      • Divide total assets by vault token supply to calculate current token price

      • Track yield accumulation over time by monitoring price changes
        
        

• Withdrawal execution and settlement

  • Withdrawal request initiation

    • When a user requests to withdraw vault tokens:

      • User specifies the amount of vault tokens to withdraw

      • User selects withdrawal type (if applicable)

      • Contract calculates USDC amount owed: USDC Owed = Vault Tokens * Current Token Price

      • User confirms the transaction

  • Settlement process

    • USDC settlement times vary by vault. nuYLDS withdrawals settle within minutes to 2 U.S. business days, while nuHELOC withdrawals settle within minutes to 5 U.S. business days. Once your withdrawal is processed, USDC is transferred to your wallet.

  • Liquidity management for withdrawals

    • The vault maintains sufficient liquidity to process withdrawals:

      • For YLDS (highly liquid): instant withdrawals possible anytime

      • For HELOC loans (less liquid): standard redemptions take longer as assets are liquidated

  • Settlement confirmation

    • Once settlement completes, the transaction is recorded on-chain:

      • Vault tokens are burned (removed from supply)

      • USDC is transferred to user's wallet

      • Vault record is updated reflecting the reduced asset base
        
        

• Contract addresses (Ethereum mainnet)

  • [Contract addresses to be added for:]

    • nuYLDS vault contract

    • nuHELOC vault contract

    • Future vaults