# FAQ & Glossary ## FAQ ### General **What is Dawn Vault?** A yield-generating vault on Solana built by Dawn Labs, an active Solana validator operator. It combines Kamino Multiply, lending aggregation, and delta-neutral strategies for optimized risk-adjusted returns. **What makes Dawn Vault different?** (1) **Validator-native alpha** — dawnSOL adds staking rewards on top of strategy returns; (2) **Full transparency** — every source of yield is decomposed and disclosed; (3) **Yield Smoothing Reserve** — validator commission revenue stabilizes returns. **Is Dawn Vault custodial?** The intended product architecture is non-custodial, with assets held by the on-chain vault program rather than by an individual operator. This repository, however, contains the off-chain operator stack only. It does not include the on-chain custody program or deployed addresses, so that guarantee must be verified from separate on-chain documentation. **Who operates Dawn Vault?** Dawn Labs, a Solana operations partner based in APAC. We run validator infrastructure and operate the vault with our own capital alongside depositors. ### Yield **Where does the yield come from?** * **Kamino Multiply** — Leveraged stablecoin loops (ONyc/USDC \~16%, USDG/PYUSD \~9.5%) * **Lending interest** — USDC lent to Kamino and Jupiter * **Funding rate payments** — SOL-PERP perpetual futures (when active) * **Staking rewards** — dawnSOL \~7% APY (when DN is active) See [Transparency](/dawn-vault/transparency.md) for full details. **What APY can I expect?** 9-16% from the Base Layer (Kamino Multiply + Lending). During high SOL funding rate periods, up to 20% when the Alpha Layer is active. **Is the APY guaranteed?** No. APY depends on market conditions and is variable. The Yield Smoothing Reserve helps stabilize but does not guarantee any minimum. **How is yield distributed?** Auto-compounded into the vault. No claiming or harvesting. LP token share price increases as the vault earns yield. ### Deposits & Withdrawals **What assets can I deposit?** USDC (SPL token on Solana). **Is there a lock-up period?** No. Withdraw at any time. **What are the fees?** Performance: 20% (HWM-based), Management: 1%/year, Deposit: 0%, Withdrawal: 0.1%. See [Fees & How to Use](/dawn-vault/fees-and-usage.md). ### Risk **Can I lose money?** Yes. Strategies minimize risk, but loss is possible due to smart contract bugs, market events, or other factors. See [Risk & Security](/dawn-vault/risk-and-security.md). **How is risk managed?** Multi-layered system: Multiply Risk Scorer (4 dimensions: depeg risk, liquidation proximity, exit liquidity, reserve pressure), Lending Risk Scorer (5 dimensions), Protocol Circuit Breaker, staged deleverage protection, DN risk manager, guardrails and kill switch. **Is the smart contract audited?** The open-source portion in [github.com/DawnLabsTech/vault](https://github.com/DawnLabsTech/vault) is the off-chain operator stack. Kamino has public audits. Audit claims for the separate on-chain vault / custody layer should be checked against the actual deployed program and its audit reports. A dedicated third-party audit for the full product remains planned. **Is the code open source?** Yes for the off-chain operator stack: bot, backtest engine, dashboard, and AI support services are open source in [github.com/DawnLabsTech/vault](https://github.com/DawnLabsTech/vault). That does not, by itself, prove that the separate on-chain custody layer is published in this same repository. *** ## Glossary | Term | Definition | | --------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | | **APY** | Annual Percentage Yield — annualized return including compounding | | **Base Layer** | Always-on yield strategy (Kamino Multiply + Lending) | | **Alpha Layer** | Conditional yield strategy (delta-neutral) — activates only during favorable conditions | | **Circuit Breaker** | Autonomous safety mechanism: auto-exit on TVL crash, oracle drift, or withdrawal failure | | **dawnSOL** | Dawn Labs' Liquid Staking Token — represents staked SOL with Dawn Labs' validator | | **Delta-Neutral (DN)** | Equal long spot + short perp positions, eliminating directional exposure while earning funding rates | | **Funding Rate (FR)** | Periodic payment between long/short traders in perpetual futures to keep perp prices aligned with spot | | **High Water Mark (HWM)** | Highest-ever share price — performance fees only charged on new profits above HWM | | **Kamino Multiply** | Leveraged stablecoin loop strategy on Kamino — deposit collateral, borrow, swap, re-deposit | | **LP Token** | Liquidity Provider Token — represents a depositor's proportional share of a vault | | **LST** | Liquid Staking Token — represents staked assets usable in DeFi while earning staking rewards | | **Manager Bot** | Off-chain automated system executing vault strategies, managing positions, monitoring risk | | **Market Scanner** | Monitors Kamino Multiply pool APYs and recommends switching when economics justify | | **Multiply Risk Scorer** | 4-dimension evaluation: depeg risk (30%), liquidation proximity (30%), exit liquidity (20%), reserve pressure (20%) | | **Lending Risk Scorer** | 5-dimension evaluation: TVL scale (30%), protocol maturity (20%), reserve utilization (25%), deposit concentration (15%), incident history (10%) | | **PDA** | Program Derived Account — Solana account owned by a program, used for non-custodial asset custody | | **Share Price** | Value of one LP token in the vault's base asset. Increases as the vault earns yield | | **TVL** | Total Value Locked — total assets deposited in a vault or protocol | | **Voltr** | Vault framework by Ranger Finance on which Dawn Vault is built | | **Yield Provenance** | Practice of decomposing and disclosing every source of vault yield | | **Yield Smoothing Reserve (YSR)** | Reserve funded by validator commission that stabilizes vault APY during unfavorable conditions | --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.dawnlabs.tech/dawn-vault/faq-and-glossary.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. 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