Flow of Funds
This page describes the standard flow of funds where Evolve issues multiple yield products (including eUSD and future vault products). Each Vault is a distinct product/strategy with bankruptcy-remote segregated vault structure, segregated asset control, and vault-specific accounting implemented using segregated MPC wallets and (where relevant) segregated exchange sub-accounts per Vault.
Structure at a glance
Evolve creates multiple Vaults (e.g., Vault A / Vault B / Vault C). Users deposit into a specific Vault, and Evolve issues the Vault’s receipt token/position to the user under that Vault’s terms.
Core principle: assets, liabilities, cashflows, and reporting are Vault-specific. Segregation is implemented via:
Segregated MPC wallets per Vault (deposit, strategy/collateral, redemption/processing)
Segregated exchange sub-accounts per Vault (where execution requires exchanges)
Parties and roles
Users Deposit into a specific Vault and hold the Vault receipt token/position.
Issuer — Evolve Creates Vaults, defines Vault terms (with Curator input where applicable), issues tokens/positions, and oversees service providers and controls.
Vault Product-level pool with its own bankruptcy-remote segregated vault structure, accounting, and terms.
Curator / Strategy Operator Executes the strategy for a Vault and manages risk with respect to deployments, rebalances, and liquidations (within defined policies).
Segregated MPC Wallets (per Vault) Onchain wallets dedicated to each Vault (e.g., deposit, collateral/strategy, redemption/processing) used to receive, hold, and move assets.
Segregated Exchange Accounts (per Vault) Vault-specific exchange sub-accounts used for execution, hedging, and yield strategies (where relevant).
Administrator / Accounting / Paying Agent function (internal or outsourced) Maintains vault-level books and records, calculates NAV, processes mint/burn and redemptions, and produces reporting.
Diagram — end-to-end flow of funds
Step-by-step asset flows
1) Deposit and issuance (User → Vault)
User selects a Vault (e.g., Vault A) and initiates a deposit.
User transfers assets to Vault A’s dedicated deposit MPC address.
Operations/admin logic validates receipt and eligibility checks (as applicable).
Evolve issues the Vault token/position to the user under Vault A and updates Vault-level accounting.
2) Deployment / execution (Vault → DeFi / Exchanges)
Assets are held in Vault A’s MPC wallets under vault-specific policies.
If the strategy uses exchanges, assets may be transferred to Vault A’s segregated exchange sub-accounts (and later swept back, where applicable).
Curator/strategy operator executes actions for Vault A within defined permissions:
DeFi deployments (whitelisted protocols/endpoints)
Exchange execution / hedging
Rebalances and risk actions
3) Income and P&L collection (DeFi / Exchanges → Vault)
Strategy income, realized P&L, and principal flows return to Vault A attribution via:
Vault A collateral/strategy MPC wallets, and/or
Vault A exchange sub-accounts, with periodic sweeps back to MPC wallets where applicable.
4) Fees and expenses (paid from the Vault)
Vault-level fees (management and/or performance, if applicable) are:
accrued and settled from Vault A assets only, and
recorded in Vault A books and records.
No other Vault is impacted.
5) Distributions (if the Vault pays out)
If Vault A supports periodic payout:
Evolve processes distributions from Vault A’s redemption/processing MPC wallet to user wallets, per Vault terms.
6) Redemption (Vault → User)
User submits a redemption request for Vault A (per redemption rules, cooldowns, and limits).
Evolve calculates redemption amount based on Vault A NAV/price and applies fees (if applicable).
Vault A sources liquidity by:
using on-hand liquidity buffers, and/or
unwinding DeFi positions, and/or
closing exchange hedges and transferring assets back to MPC wallets.
Evolve pays the user from Vault A’s redemption/processing MPC wallet and burns/reduces the user’s Vault token/position.
Segregation rules (what this prevents)
Segregation is enforced at the Vault level through:
a dedicated MPC wallet set per Vault (deposit, collateral/strategy, redemption/processing), plus
segregated exchange sub-accounts with clear Vault attribution, plus
Vault-specific books and records (positions, P&L, NAV, token supply, user balances)
Cross-Vault transfers are prohibited unless explicitly defined by product terms and controls (e.g., formal migration processes with disclosures).
In summary
Evolve’s architecture is designed to ensure each Vault operates as its own bankruptcy-remote segregated vault structure with:
vault-specific custody and execution rails
vault-specific accounting and reporting
clear attribution of assets, liabilities, cashflows, and performance
This enables multiple products (including eUSD and future vaults) to run in parallel without commingling risk or operational ambiguity.
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