Vault Protocol

A decentralized, overcollateralized stablecoin protocol built on Ethereum

What is Vault?

Vault Protocol allows users to deposit WETH and WBTC as collateral to mint vUSD, a USD-pegged stablecoin. The protocol ensures stability through 200% overcollateralization and automatic liquidation mechanisms.

How It Works

1. Deposit Collateral (WETH/WBTC) → 2. Mint vUSD (up to 50% of collateral value) → 3. Maintain Health Factor > 1.0

• Deposit: Lock WETH or WBTC as collateral
• Mint: Create vUSD stablecoins (max 50% of collateral value)
• Health Factor: Must stay above 1.0 to avoid liquidation
• Liquidation: 10% bonus for liquidators who restore protocol health

Technical Architecture

Component	Purpose
VaultEngine	Core protocol logic, collateral management
VaultStablecoin (vUSD)	ERC20 stablecoin token pegged to USD
PriceOracle	Chainlink price feeds with staleness protection
MockERC20	Test tokens for development

Key Parameters

• Liquidation Threshold: 50% (200% overcollateralization)
• Liquidation Bonus: 10%
• Minimum Health Factor: 1.0
• Supported Collateral: WETH, WBTC
• Price Feeds: Chainlink ETH/USD, BTC/USD

Quick Start

Local Development

# Start local blockchain
make anvil

# Deploy contracts
make deploy-local

# Run tests
make test-basic

Basic Operations

# Get test tokens
cast send $WETH "faucet(uint256)" 10000000000000000000 --rpc-url $LOCAL_RPC_URL --private-key $ANVIL_PRIVATE_KEY

# Deposit collateral
cast send $WETH "approve(address,uint256)" $VAULT_ENGINE 5000000000000000000 --rpc-url $LOCAL_RPC_URL --private-key $ANVIL_PRIVATE_KEY
cast send $VAULT_ENGINE "depositCollateral(address,uint256)" $WETH 3000000000000000000 --rpc-url $LOCAL_RPC_URL --private-key $ANVIL_PRIVATE_KEY

# Mint stablecoins
cast send $VAULT_ENGINE "mintStablecoin(uint256)" 1000000000000000000000 --rpc-url $LOCAL_RPC_URL --private-key $ANVIL_PRIVATE_KEY

Contract Addresses (Local)

Update your .env after deployment:

VAULT_ENGINE=0x...
VAULT_STABLECOIN=0x...
WETH=0x...
WBTC=0x...

🛡️ Security Features

• Reentrancy Protection: All state-changing functions protected
• Price Feed Validation: 3-hour staleness timeout
• Overcollateralization: 200% minimum ratio
• Liquidation Mechanism: Automatic position closure
• Access Control: Owner-based minting restrictions

🎯 Make Commands

Command	Description
make anvil	Start local blockchain
make deploy-local	Deploy to local Anvil
make test-basic	Run basic functionality tests
make monitor	Real-time vault monitoring
make status	Check contract status

⚡ Example Usage

# Complete user journey
make deploy-local           # Deploy contracts
make test-basic            # Test all functions
make monitor               # Watch your positions