Optymize Vault Model

The Optymize Vault model creates vaults (each an “Optymize Vault”) for depositors to stake their tokens to earn yield and mitigate Security Incident risk together. The tokens staked will be pooled together and all depositors will share the losses (if any) with one another proportionately when a Security Incident happens. The Optymize Vault is not dependent on a centralized risk-underwriting and claim process as the risk is shared among all depositors.

Unlike regular Exchange Traded Funds (“ETFs”), where investors are buying a basket of assets and all profits & losses are shared, the Optymize Vault only shares downside risk whenever there is a Security Incident. This essentially means depositors are protecting each other on a peer-to-peer (P2P) basis without intermediaries and hence eliminates the need of pricing and paying coverage premiums altogether.

Unlike regular Exchange Traded Funds (“ETFs”), where investors are buying a basket of assets and all profits & losses are shared, the Optymize Vault depositors only share downside risks when there is a Security Incident and yield from each token type is not shared between the depositors in the Optymize Vault. Hence, the Optymize Vault model innovatively allows depositors to keep their upside potential whilst diversifying their downside risk. Depositors are protecting each other on a peer-to-peer (P2P) basis without intermediaries and hence eliminates the need of pricing, paying coverage premiums and assessing claims altogether.

• Example: Depositor A has staked Token A into an Optymize Vault that allows staking of Token A/B/C/D/E

  Event	Pay-out at maturity or when Security Incident happens
  No Security Incident at maturity and Optymize Vault opens	Receives ALL token A staked and associated rewards
  Token A suffers a Security Incident	Vault opens and Depositor A receives Token B and C and D and E (or the equivalent in stablecoins provided by Optymize’s treasury) as compensation, and retains a small portion of Token A
  Token A suffers a Security Incident	Vault opens and Token A depositor receives token B and C and D and E (or equivalent in stablecoins) as compensation
  One of Token B/C/D/E suffers a Security Incident	Vault opens and Depositor A shares partial loss. A portion of Token A gets swapped for Token B/C/D/E (whichever one suffered a Security Incident)

Initially when Optymize creates an Optymize Vault, it will pre-determine the vault size, tenor and the tokens mix. The pooled tokens theoretically should have similar risk levels to each other in order to avoid relatively low risk tokens from subsidizing relatively higher risk tokens. Optymize selects the tokens to be pooled together based on a combination of factors including TVL, risk ranking, audit scores, market demand and community feedback. We strongly encourage the community to share with us their thoughts through voicing their needs or voting or providing suggestions on the Optymize Twitter.

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