Vaults
Vaults are a fundamental component of the Synthetix V3 ecosystem, allowing liquidity providers (LPs) to deposit collateral and participate in the protocol. Vaults are designed to hold specific collateral types and are linked to pools, which aggregate and allocate liquidity to derivative markets.
Depositing Collateral
LPs can deposit collateral into vaults that have been approved by governance. Each vault is associated with a specific collateral type.
To deposit collateral:
Connect your wallet to the Synthetix V3 interface or a compatible third-party application
Select the vault corresponding to the collateral type you wish to deposit
Enter the amount of collateral you want to deposit
Confirm the transaction and pay the associated gas fees
Once the transaction is confirmed, your collateral will be securely stored in the vault and can be delegated to pools to earn rewards.
Collateral Types and Risk Parameters
The Synthetix Spartan Council manages the accepted collateral types and their corresponding risk parameters through Synthetix Improvement Proposals (SIPs) or Synthetix Configuration Change Proposals (SCCPs).
Risk parameters for each collateral type include:
Issuance Ratio: The minimum ratio of collateral value to minted snxUSD
Liquidation Ratio: The collateralization ratio below which a liquidity position may be liquidated
Vaults and Pools
Each pool in Synthetix V3 has one vault for each approved collateral type. The pool owner determines the accepted collateral types for their pool.
Key aspects of the vault-pool relationship:
Liquidations of individual positions affect only the specific vault, not the entire pool
Entire vaults can be liquidated if the aggregate collateral-to-debt ratio falls below the liquidation ratio
Pool owners can attach rewards distributors to specific vaults for targeted liquidity incentives
Account Permissions
Synthetix V3 introduces account permissions, allowing LPs to delegate specific actions to other addresses:
ADMIN: Full control over the account, except for transferring ownership
WITHDRAW: Ability to withdraw collateral from the account
REWARDS: Ability to claim rewards on behalf of the account
MINT: Ability to mint snxUSD using the account's collateral
DELEGATE: Ability to delegate the account's collateral to pools
Note: DEPOSIT is permissionless.
Borrowing sUSD
Vaults offer LPs the option to borrow sUSD against their collateral without direct exposure to active markets, enabling users to access liquidity while maintaining their collateral position.
By understanding the role of vaults, collateral types, risk parameters, and account permissions, LPs can effectively manage their collateral and participate in the Synthetix V3 ecosystem, earning rewards and supporting the liquidity needs of derivative markets.
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