Dfyn V2’s Yield Aggregator Capability of Vaults
Dfyn V2, with its improved core architecture, offers the most comprehensive suite of offerings that any DeFi trader would ever require. In this blog, we want to dive deeper into one such offering powered by a contract that makes Dfyn stand out from all other competing DEXs.
Dfyn V2’s Vault Contract
Before we understand the functionality of the contract, let’s take a step back and try to answer a broader question.
What is the core intent of anyone existing in the DeFi ecosystem?
It is to exist in a decentralized ecosystem and earn more capital. To help users accomplish this goal, our ecosystem offers The Vault Contract. It is essentially a smart contract that functions as the backbone for our DEX.
The vault contract utilizes an algorithmically-controlled liquidity pool that enables users to deposit their assets and earn yield on them.
One of the ways, you can leverage our vault contract is with a capability we call FlashLoans.
Flash loans allow users to borrow tokens for a very short period of time without having to first deposit collateral. This can provide greater flexibility when executing investment strategies or other operations that require the use of borrowed tokens.
As a liquidity provider, this increases the utility of your liquidity and can help you accrue more rewards.
Moreover, Flash loans can allow normal users to generate higher returns on their investments.
For example, a user can borrow tokens to make a trade that is expected to generate a quick profit, and then repay the loan before the price of the tokens moves against them.
These complex trading strategies will falter with traditional lending protocols, but our Vault Contract is capable of providing such offerings. This contract is integrated into our core contracts and seamlessly tracks assets and facilitates cheap and efficient swaps by maintaining the balance of each user and pool, which is stored on the blockchain via a series of event logs.
Having said this, the basic rule of thumb for any blockchain based product is that the point of greatest dependence is also the point of greatest vulnerability. We understand that the vault contract will be subject to the threat of attacks, which is why we’ve already taken security measures. The two key measures are:
- The protection against re-entrancy attacks
It is a type of exploit where an attacker can repeatedly call a function in a smart contract before the first call has completed. This can allow the attacker to drain the contract of its assets.
To prevent this type of attack, the contract follows the “pull over push” pattern, where the contract first checks the necessary conditions before making any state changes or interactions. This ensures that the contract will not be vulnerable to re-entrancy attacks.
2. The prevention of admin withdrawal:
This feature ensures that there is no privileged access to the funds stored in the contract and that the funds are only accessible to the users who have deposited them, ensuring that the contract is decentralized and autonomous
Additionally, the contract has multiple layers of Access controls and rate limits that prevent any malicious or accidental misuse of the funds.
Moreover, the vault contract has also undergone two security audits and passed with flying colors. To know more about the vault contract, it’s integration with our core and peripheral contracts, and the true extent of its capabilities, feel free to check out our whitepaper.
