Yield Provenance

Dawn Vault fully decomposes and discloses the source of every basis point of yield. We believe depositors deserve to know exactly where their returns come from.

Why It Matters

Many DeFi yield products advertise an APY number without explaining its composition. This creates two problems:

1. Depositors can't assess sustainability — Is 15% APY coming from a reliable source or a temporary incentive?

2. Risk is hidden — Different yield sources carry different risks

Dawn Vault solves this with Yield Provenance — a full breakdown of APY by source.

USDC Vault Yield Decomposition

Component	Source	Typical Range	Risk Level
Lending Yield	Interest from USDC lending (Kamino, Drift, Jupiter)	3–8%	Low
Funding Rate PnL	Net payments received from SOL-PERP shorts	8–23%	Medium
Staking Yield	dawnSOL staking rewards on spot leg	~7%	Low
Borrowing Cost	Interest paid on borrowed assets (if applicable)	-(0–3%)	N/A
Execution Cost	Swap slippage, gas fees, position entry/exit costs	-(0.1–0.5%)	N/A
= Net Vault APY	Sum of all components	8–30%+	—

Example Breakdown

During a typical high-FR period:

Lending Yield:      +5.2%   (Kamino USDC @ best rate)
Funding Rate PnL:  +18.4%   (SOL FR collection, net of costs)
Staking Yield:      +7.1%   (dawnSOL on 50% allocation)
Execution Cost:     -0.3%   (swaps, gas)
─────────────────────────
Net Vault APY:     +30.4%

During a low/negative FR period (lending only):

Lending Yield:      +6.1%   (Kamino USDC)
Funding Rate PnL:   +0.0%   (DN strategy inactive)
Staking Yield:      +0.0%   (no SOL position)
Execution Cost:     -0.0%   (minimal rebalancing)
─────────────────────────
Net Vault APY:      +6.1%

How We Report

Every epoch, the following data is published:

• APY breakdown by source (table above)

• Current allocation split (Base vs. Alpha)

• Hedge ratio (spot vs. short notional)

• Yield Smoothing Reserve balance

• Cumulative performance since inception

See Proof-Based Reporting for the full disclosure framework.

Commitment

We will never report a blended APY number without providing its full decomposition. If we can't explain where yield comes from, we won't offer it.