Concepts

Punch Vaults are on-chain lockers that provide a wide variety of complex DeFi yield strategies in a simplified user interface.

While there are a variety of tokenization standards used in Punch Vaults, depending on the type of input asset and desired strategy, the majority are built using the ERC-4626 standard, a framework that has gained popularity among major DeFi projects for its efficiency and transparency.

How ERC-4626 Punch Vaults Work

With ERC-4626 tokenized vaults, users can deposit assets and receive receipt tokens, commonly referred to as "shares." These tokens are a live representation of a user's holdings within a given vault, with each vault having its own unique token identifier. This system ensures that users have clear and accurate information about their deposits and yields.

Vault Strategies

Punch Vaults offer a variety of strategies to cater to different user needs:

• Simple Wrappers: These are straightforward strategies that wrap basic assets, often with a 0% fee.

• Complex Integrations: These strategies involve more sophisticated interactions with downstream DeFi applications within the Blast ecosystem. Due to their complexity, these strategies may incur fees up to 10% of the gained rewards.

• Important note: NFT-based strategies will bring unique contracts and reward systems into the fold.

Strategies are actively monitored to ensure their effectiveness and security. As the project grows, additional strategies will be introduced to provide users with more options and opportunities.

Fees and Treasury Contributions

There is a fee associated with each Punch Vault, determined by the complexity of the strategy:

• Simple Strategies: Typically have a 0% fee.

• Complex Strategies: May have fees up to 10% of the gained rewards.

Importantly, no fees will ever be applied to deposits. This ensures that users' initial investments are fully allocated to their chosen strategies.

All fees generated from the Punch Vaults are automatically deposited into the KittyPunch treasury. This mechanism supports the decentralized growth of the ecosystem and the unique NFT yield system, ensuring that the entire community benefits from the success of the Punch Vaults.