Understanding Smart Vaults
Last updated
Last updated
This article talks about the concepts behind the smart vaults. If you are after a full tutorial on using the smart vaults, please see the quick start guide.
An essential feature of Smart Vaults on TheStandard.io platform is the unprecedented level of control and security they offer to users. It's crucial to understand that TheStandard Smart Vaults are designed with autonomy and decentralization at their core. This section will explain how control over Smart Vaults works and the innovative mechanism of transferring control through NFT keys.
Web3 Wallet Integration: Each Smart Vault is intrinsically linked to the Web3 wallet that created it. This ensures that the creator, and only the creator, has control over the vault's operations, including adding or removing collateral, minting debt against the collateral, and closing the vault.
Direct Control: The direct control mechanism means that as long as you hold the private keys to your Web3 wallet, you are the sole operator of your Smart Vault. There are no intermediaries, centralized authorities, or hidden mechanisms that can alter or influence your control over the vault.
Innovative Transfer Mechanism: TheStandard.io employs a novel approach to transfer the control of Smart Vaults using NFT (Non-Fungible Token) keys. When a Smart Vault is created, an associated NFT key is minted. This NFT represents the control and ownership of the Smart Vault.
Transferring Ownership: Should you decide to transfer ownership of the Smart Vault, you transfer the NFT to another party. Upon receiving the NFT, the new holder gains full control over the Smart Vaults debt and collateral, just as if they had created it themselves. This process is secure, seamless and maintains the integrity and security of the vault.
Benefits of NFT Key Transfer:
Security: This method ensures that the transfer of control is deliberate and secure, reducing the risk of unauthorized access.
Flexibility: It provides users with the flexibility to sell, trade, or gift their Smart Vaults while maintaining the security and integrity of the underlying assets.
Transparency: The transfer of the NFT key is recorded on the blockchain, providing a transparent and immutable record of ownership.
As the creator and controller of a Smart Vault, your role encompasses managing the collateral, monitoring the health of your vault, and making informed decisions about your financial strategies within the protocol. The transferability feature via NFT keys adds a layer of flexibility, allowing you to manage your assets and control in a way that aligns with your financial goals and security preferences.
By integrating Smart Vaults with Web3 wallets and employing NFT keys for transferability, TheStandard.io ensures that users enjoy a high degree of control, security, and flexibility, embodying the principles of autonomy and decentralization that are foundational to the DeFi ecosystem.
