Staking :-

Holders of BOB and $BOTS would be able to stake their NFTs and Tokens Respectively to earn Yeild in $BOTS fueled by a combination of Platform Revenue & Yield Strategies to Provide High APY Rates in a Sustainable way. Stakers get the right to vote for Platform Changes and Decisions.

Introduction to ERC-4626

ERC-4626 is a standardized interface for yield-bearing vaults within EVMs. It defines a common structure for tokenized vaults that issue ERC-20 shares representing a proportional claim on the underlying assets. This standard streamlines integrations with DeFi protocols, enhancing security and interoperability. By leveraging ERC-4626, vaults benefit from optimized asset management, uniform share-to-asset conversions, and improved efficiency for deposit and withdrawal operations. Learn more about ERC-4626 Standard here.

Tokenized Vaults for Bots of Bitcoin

The Bots of Bitcoin ecosystem currently plans to implement two variations of ERC-4626-based tokenized vaults: Lending Vaults and Multi-Asset Vaults. While both follow the fundamental principles of ERC-4626, they introduce modifications to optimize performance and security in their respective use cases.

1. Lending Vaults

Lending Vaults serve as market-making tools by supplying liquidity to decentralized lending protocols such as AAVE. They function as ERC-4626 vaults, issuing ERC-20 shares that represent the underlying deposited assets. The share value is determined through OpenZeppelin’s standard share-to-asset calculation mechanisms, ensuring fair and transparent valuation.

Key Features

1. Initial Share Value Determination – Upon vault initialization, the value of each share is established based on predefined parameters. In this case it would be 10:1 Share to Asset pegging.
2. Consistent Upward Share Value Trajectory – Share value always appreciates over time due to accrued yields and built-in anti-inflationary mechanisms.
3. Slippage Protection Against Inflation Attacks – To counteract short-term arbitrage strategies and inflation attacks, the vault incorporates a slippage penalty that always favors long-term investors and strengthens vault sustainability. See more about it here.
4. Fee Structure & Distribution – Vaults charge an additional fee, distributed as follows:
   • 50% reinvested into the vault to enhance yield.
   • 25% allocated to the Bots of Bitcoin ecosystem for community incentives and rewards.
   • 25% directed to the treasury as a revenue stream.

APY Accrual Mechanisms

Lending Vaults generate yield through three primary mechanisms:

1. Liquidity Supply Yield – Deposited assets generate yield by supplying liquidity to protocols like AAVE. The accrued interest increases the value of vault shares over time.
2. Slippage Penalties Favoring the Vault – To mitigate price manipulation attacks and inflation exploits, built-in slippage mechanisms of the ERC-4626 Standard ensure that the vault always benefits from short-term trading inefficiencies.
3. Vault Fee Accumulation – A percentage of transaction fees is allocated back into the vault, ensuring continued value appreciation for long-term stakeholders.

Example Calculation