# Vault Logic 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 > πŸ”— All Vaults are inherently cross-chain and can allocate to pools across Ethereum, Arbitrum, Optimism, Base, and more. *** ### βš™οΈ 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: * πŸ“ˆ Higher weights for low-volatility, high-reward pools * πŸ›‘οΈ Reduced risk from overexposure to any single protocol * πŸ”„ Allocation is recalculated quarterly to reflect market changes *** ### πŸ” 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. *** ### πŸ” 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: * βœ… Executed from the user’s own AA wallet * βœ… Explicitly signed by the user * βœ… Transparent and traceable on-chain There is no custody risk, and the protocol cannot access or withdraw user funds at any time. *** ### πŸ›  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 * πŸ† **Vault Leaderboards** – On-chain performance ranking and reward mechanisms --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://zap-pilot.gitbook.io/zap-pilot/product/protocol-mechanics/vault-logic.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.