> For the complete documentation index, see [llms.txt](https://docs.goevolve.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.goevolve.xyz/dd-questioniare/flow-of-funds.md).

# 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

```
Users
  |
  | (deposit request; eligibility/KYC gates as applicable)
  v
Issuer: Evolve
  |
  | creates Vaults + publishes Vault terms + appoints Curator (if applicable)
  v
+-------------------+    +-------------------+    +-------------------+
| Vault A           |    | Vault B           |    | Vault C           |
| (Product/Strategy)|    | (Product/Strategy)|    | (Product/Strategy)|
+-------------------+    +-------------------+    +-------------------+
  |        |                 |        |                |        |
  |   Segregated             |   Segregated            |   Segregated
  |   MPC Wallets (A)        |   MPC Wallets (B)       |   MPC Wallets (C)
  |   + Exchange Accts (A)   |   + Exchange Accts (B)  |   + Exchange Accts (C)
  |        |                 |        |                |        |
  v        v                 v        v                v        v
Deploy into DeFi / Exchanges / Hedging / Yield Strategies (per Vault mandate)
  |
  v
Strategy P&L returns to the same Vault’s MPC wallets / exchange accounts
  |
  v
Fees -> Distributions (if any) -> Redemptions (per Vault rules)
```

***

### Step-by-step asset flows

#### 1) Deposit and issuance (User → Vault)

1. User selects a Vault (e.g., **Vault A**) and initiates a deposit.
2. User transfers assets to **Vault A’s dedicated deposit MPC address**.
3. Operations/admin logic validates receipt and eligibility checks (as applicable).
4. Evolve issues the Vault token/position to the user under **Vault A** and updates Vault-level accounting.

***

#### 2) Deployment / execution (Vault → DeFi / Exchanges)

1. Assets are held in Vault A’s MPC wallets under vault-specific policies.
2. If the strategy uses exchanges, assets may be transferred to **Vault A’s segregated exchange sub-accounts** (and later swept back, where applicable).
3. 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)

1. User submits a redemption request for Vault A (per redemption rules, cooldowns, and limits).
2. Evolve calculates redemption amount based on **Vault A NAV/price** and applies fees (if applicable).
3. 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.
4. 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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