What are the vaults?
The Sands of Time vaults are essentially time-lock contracts. Users deposit funds into these contracts to provide liquidity and collateral for stock trades. The vaults are essential to the ecosystem, because without their collateral there could be no trades.
How do I use the vaults?
To interact with the vaults users should first decide which asset/s they would like to seal and plan their funds accordingly (Balancer Pool). When users lock their tokens, they receive sTokens (sDeus,sDea, and/or sUni-LP) and Time tokens in return. After they receive sTokens, users can then stake them to earn rewards from fees and losses by traders. In addition, users can also stake their Time tokens to accrue governance/voting power in the DAO.
Keep in mind that collateral provided cannot be withdrawn until the end of the time-lock period.
What is the time-lock period?
The vaults will run through a period of predetermined blocks called "trading seasons." These trading seasons will run for _ blocks or approximately 6 months. At the end of each trading season the sTokens can be exchanged for locked collateral.
The First trading season in DEUS ecosystem began January 8, 2021 and is estimated to end July 8, 2021.
What if I want to exit the vaults?
As was previously stated, collateral provided will not be able to be withdrawn from the vaults, but you may sell your sTokens at any time. Your sTokens constitute your position in the vault, and may be sold through Balancer for an equivalent amount of DEA. An arbitrage bot will continuously adjust the value of sTokens to close in on a ratio of 1:1 with their unsealed counterparts, but please bare in mind that there will always be some form of slippage between these assets and fees required for exiting the vaults.
Reminder: Once you sell your sTokens you can no longer redeem original collateral provided. (Selling sDEA is like selling your DEA)
What are the risks?
While staking is a good way to earn passive income, liquidity providers must exercise due diligence before locking their tokens in the vaults. The possibility of a partial loss of fund is tiny, as traders as a whole tend to underperform the market rather than outperform. It should still be noted and considered. In the future, different vaults will exist for different asset classes and high-risk assets will be separated from their low-risk counterparts allowing stakers more freedom in risk management.
How are these risks minimized?
- The possibility for traders to go Long and Short (Short profits get paid by Long losses)
- Stock profit caps
- The insurance fund