What is A Liquidity Vault

A Liquidity Vault is a smart contract that acts as a dynamic portfolio manager. It holds and manages LP assets on behalf of its owner (and optionally, other users). Vaults can execute automated strategies, collect fees, adjust positions, and even allow deposits from others in exchange for vault shares.

Core Capabilities:

• Manages multiple LP assets

• Auto convert fees to a principal token (ETH, USDC, USDT, etc.)

• Enables auto-compounding, auto-rebalancing, and fee collection

• Allows permissioned or public deposits

Why use a Vault?

• Fewer Transactions, Less Gas: Bundle multiple LP actions (e.g. migrate, rebalance) into fewer txs

• Safer and More Secure: Vault permissions are scoped to the Vault only—unlike LP Strategies/Positions, which require permission across the entire NFT asset

• Passive Earning: Let others deposit into your Vault and take a cut from performance fees

• Simplified UX: Great for both normies and power users