Vault Logic
Explains how Zap Pilot’s Vaults work, how funds are allocated using the Kelly Criterion, and how users retain control while participating in cross-chain DeFi strategies.
Zap Pilot’s Vaults are the core units of capital allocation. Each Vault is a predefined, cross-chain strategy that automatically distributes user funds across carefully selected DeFi pools. Users retain full control of their assets through their AA wallets, while the protocol provides smart, data-driven allocation suggestions.
🧭 1. What is a Vault?
A Vault is a cross-chain investment bundle designed around a specific theme or asset category. Currently, all Vaults are curated by the Zap Pilot team, meaning users simply deposit and the protocol handles everything from pool selection to weighting.
Examples include:
Stablecoin Vault – Allocates across stablecoin lending/yield pools (e.g., Aave, Compound, Pendle, Flux)
LST Vault – Focused on Ethereum staking derivatives (e.g., stETH, rETH)
Short-Term Yield Vault (coming soon) – Targets time-sensitive opportunities on platforms like Pendle, Morpho, Kamino
🔗 All Vaults are inherently cross-chain and can allocate to pools across Ethereum, Arbitrum, Optimism, Base, and more.
⚙️ 2. Allocation Strategy: Kelly Criterion
Zap Pilot uses the Kelly Criterion to compute optimal allocation weights for each pool within a Vault. This mathematical strategy balances expected return against volatility, aiming to maximize long-term geometric growth.
Simplified Formula: allocation ∝ expected return / variance
Benefits:
📈 Higher weights for low-volatility, high-reward pools
🛡️ Reduced risk from overexposure to any single protocol
🔄 Allocation is recalculated quarterly to reflect market changes
🔁 3. Rebalancing: User-Driven
Because all assets remain inside the user’s own AA wallet, the protocol cannot directly rebalance on the user’s behalf. Instead, Zap Pilot provides a hybrid system:
Quarterly Rebalancing Suggestions – Sent via email, based on updated Kelly weights
One-Click Rebalance Tool – Available on the frontend for users to execute via their wallet
This model ensures full user sovereignty while still offering intelligent allocation guidance.
🔐 4. Security & Non-Custodial Design
Zap Pilot is strictly non-custodial. The frontend acts as a coordination layer, not a fund manager. All transactions are:
✅ Executed from the user’s own AA wallet
✅ Explicitly signed by the user
✅ Transparent and traceable on-chain
There is no custody risk, and the protocol cannot access or withdraw user funds at any time.
🛠 5. Coming Soon: Customizable Vaults
While all Vaults are currently predefined, future releases will introduce Custom Vaults, including:
🧩 User-Created Vaults – Select your own pools, adjust weights, and name your strategy
🌐 Strategy Marketplace – Publish your Vault for others to copy or follow
🏆 Vault Leaderboards – On-chain performance ranking and reward mechanisms
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