USDC Depositing
Explains how USDC staking works
Overview
The USDC Vault serves as the liquidity pool for all transactions occurring within the Gambit ecosystem. It acts as a counterparty for all trades placed on the platform.
Any individual can deposit USDC in the Vault to provide liquidity to the platform. In return, they receive a proportion of the fees paid by those trading within Gambit. These fees are distributed in accordance with the proportion of Gambit trading fees, offering an incentive for individuals to deposit assets in the Vault.
gUSDC
Upon staking USDC, you receive gUSDC of equal value to your deposited USDC (this gUSDC can later be converted back to USDC through a withdrawal request).
The gUSDC follows the yield-bearing ERC-4626 token standard. The 'closing fees' allocated to USDC depositors increase the value of gUSDC, allowing you to withdraw more USDC than you initially deposited upon withdrawing USDC in the future.
The expected annual return can be viewed from the 'Est. APY' section at the top of the Vault page. (Additional rewards may also be provided to depositors during events.)
Collateral Ratio
One of the primary roles of the Vault is to serve as the counterparty for trades executed within the Gambit platform.
If a trader earns a profit (positive PnL), they receive the prize from the Vault.
Conversely, if a trader incurs a loss (negative PnL), that loss is sent to the Vault.
The profits/losses of the trader are first accumulated/deducted from the Vault's treasury.
The payout collateral ratio of the vault fluctuates according to the PnL of the traders. Losses from the traders accumulate in the vault, increasing the collateral ratio, while traders' profits lower the ratio. The payout readiness ratio is calculated as follows:
The treasury serves to protect the funds of USDC depositors. Even if the payout readiness ratio decreases in the short term, it is designed to gradually increase over the long term. This prevents the PnL from directly influencing the price of gUSDC, promoting a stable rate of return.
The payout readiness ratio also impacts the waiting period for withdrawals from the Vault. The higher the ratio, the shorter the waiting period.
Deposits and Withdrawals
Epoch System
Gambit's profit and loss data is supplied to the Vault in a decentralized manner. Therefore, it uses an Epoch system for calculations. The costs of performing real-time PnL calculations on-chain are prohibitively high. Therefore, for practical reasons such as API calls and gas costs, it's not possible to provide a real-time public trade PnL feed. This is why the Epoch system is necessary, as it aids the Vault in calculating the collateral ratio.
The estimated returns and payout readiness ratio are updated each time an epoch begins, but they are not reflected in real time.
Vault Deposits
You can deposit USDC in the Vault for a certain period and receive rewards. Staking can be performed at any time. However, when withdrawing from the Vault, there are available periods, so check the 'Withdrawal Lock-up Period' and 'Eligible Withdrawal Dates' before staking.
Vault Withdrawals
After staking USDC in the Vault, it can be withdrawn at any time. The amount that can be withdrawn is the amount of USDC deposited + 'Expected Returns'. Withdrawal requests can only be made within the first 2/3 of the epoch after it begins. To withdraw the requested amount, you need to wait until a specific withdrawal epoch. Upon placing a withdrawal request, you can monitor the status of the request under 'Withdrawal Request'. It's crucial to execute the withdrawal at the available withdrawal time to complete the process. If you miss the withdrawal period, the request expires and you'll need to start the 'Vault Withdrawal Request' process again.
If the epoch length is 72 hours, withdrawal requests can be made within 48 hours after the epoch begins. For example, if an epoch starts at 00:00 on January 1, 2023, you can request a withdrawal until 00:00 on January 3, 2023.
After placing a withdrawal request, the time when you can withdraw depends on the Vault's payout readiness ratio and can range from 1 to 3 epochs later.
Over 120%: After 1 epoch (3 days)
Over 110%: After 2 epochs (6 days)
110% or less: After 3 epochs (9 days)
Once the eligible epoch begins, you must withdraw the assets within the first 2/3 of the epoch (within 48 hours for a 72-hour epoch).
If you fail to withdraw within this period, the initial withdrawal request expires, and you'll have to place a new request during the next epoch.
This approach is designed to ensure the long-term stability of the Vault in a highly volatile market.
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