Vaults

ERC-4626 tokenized vaults for Bitcoin yield generation

Sova Vaults are ERC-4626 compliant tokenized vaults that aggregate Bitcoin liquidity for cross-chain settlement operations. Depositors provide cbBTC and receive svBTC—a yield-bearing token representing proportional ownership of vault assets.

Yield derives from real economic activity: fees earned from solver operations executing cross-chain settlements. No token emissions. No inflationary rewards.

Fee Structure: 0% management fee. 10% performance fee on profits only.

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Specifications

Parameter	Value
Vault Standard	ERC-4626 Tokenized Vault
Deposit Asset	cbBTC (Coinbase Wrapped Bitcoin)
Vault Token	svBTC
Minimum Deposit	$500 USD equivalent
Network	Base Mainnet (Chain ID: 8453)

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Architecture

Deposit Flow

1. User deposits cbBTC to the Sova vault contract

2. Vault mints svBTC proportional to current exchange rate

3. cbBTC enters the capital pool available for solver operations

4. Yield accrues to the vault, increasing the svBTC:cbBTC exchange rate

Yield Generation

Vault yield is generated from protocol revenue:

Source	Description
Settlement Fees	0.5% fee on cross-chain swap volume
Solver Activity	Fees from BTC/ZEC settlement execution
Future: Staking	$SOVA token staking rewards (see Roadmap)

Unlike inflationary DeFi yields, Sova vault returns are backed by actual transaction volume flowing through the protocol.

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svBTC Token

svBTC is a rebasing vault share token implementing the ERC-4626 standard:

Property	Description
Ownership	Proportional claim on underlying vault assets
Yield Accrual	Auto-compounding via exchange rate appreciation
Composability	Fully transferable, usable in external DeFi protocols
Transparency	On-chain NAV with verifiable exchange rates

Exchange Rate Mechanics

The svBTC:cbBTC exchange rate increases over time as yield accrues:

Day 0:    1 svBTC = 1.0000 cbBTC  (deposit)
Day 365:  1 svBTC = 1.0850 cbBTC  (8.5% APY accrued)

Your svBTC balance remains constant. Its redemption value appreciates.

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Fee Structure

Fee Type	Rate	Description
Management Fee	0%	No annual fee on AUM
Performance Fee	10%	Applied only to realized profits
Deposit Fee	0%	No entry cost
Withdrawal Fee	0%	No exit cost

Performance Fee Calculation

Vault gross yield:    10.0%
Performance fee:       1.0%  (10% of 10%)
Net yield to LP:       9.0%

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Smart Contracts

All contracts deployed on Base Mainnet and verified on BaseScan:

Contract	Address	Function
svBTC Token	0xdFc4047620bd71F3dd781f1048f6890b76281D36	ERC-4626 vault shares
Vault Strategy	0xc23AE9352739E0AC242Bf0263980769C06a8F52B	Capital deployment logic
Conduit	0x1894fF3B7d07151b0b8aaBF059Ab4aD28EB6770f	Asset routing
Role Manager	0xf97fC42e1B3c4c570cD0Ebc9f0967fF7C49B4360	Access control

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Security Model

Smart Contract Security

• ERC-4626 Standard — Battle-tested tokenized vault implementation

• OpenZeppelin Base — Industry-standard contract libraries

• Transparent Proxy — Upgradeable pattern for security patches

• Role-Based Access — Granular permissions via Role Manager

• Multi-Sig Admin — Critical functions require 2/3+ signatures

Risk Factors

Risk	Mitigation
Smart Contract	Verified contracts, proxy upgradeability for patches
Solver Default	Collateralization requirements, insurance reserves
Oracle Failure	Multiple price feeds, staleness checks
Liquidity	Withdrawal queue system for large redemptions

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Technical Documentation

For comprehensive vault architecture, strategy implementation, and integration details:

Welcome to Sova Vaults

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Get Started

Depositing to Vaults