Vaults are at the core of how Nest manages assets, allowing users to deposit funds, earn yield, and withdraw efficiently. They function as automated smart contracts that securely store assets, allocate them to yield strategies, and ensure that users can redeem their funds when needed.

Nest vaults are designed for permissionless access to the highest quality real world assets (RWAs) delivering institutional-grade yields without compromise, meeting the highest requirements for security, compliance, and liquidity from both retail and institutional users.

What Is a Vault?

A vault is a smart contract that holds and manages funds onchain. Instead of merely storing assets, vaults deploy them into pre-defined strategies that generate yield. When a user deposits stablecoins like pUSD, USDC, or USDT, they receive a receipt token, which represents their share of the vault’s total assets.

Each vault issues a different receipt token, which are also commonly referred to as ‘Liquidity Provider’ (LP) tokens’. These receipt tokens can be used as collateral on other protocols within Plume’s ecosystem, allowing for advanced RWAfi strategies such as looping, and yield farming.

Vaults operate with different strategies depending on their structure. Stable yields from RWAs represent strategies with real world returns from treasuries, bonds, public debt, ETFs, oil & gas, trade financing, and more. Crypto-native strategies involve returns from staking, lending, and liquidity provision.

Users can choose their own stablecoin strategy by depositing funds across one or more Nest vaults in line with the strategy that suits their risk and liquidity requirements.

How Nest Vaults Work

Nest vaults implement Nucleus’ vault framework for structured asset management and Plume’s SkyLink for cross-chain yield distribution. This enables efficient liquidity management, ensuring that deposits and withdrawals are processed smoothly while maintaining capital efficiency across multiple blockchains.

1. Depositing Assets
   Users deposit funds into a Nest vault, receiving a receipt token that tracks their share of the vault’s holdings.
   
   
2. Yield Generation
   The vault automatically allocates deposits to various strategies. Yield accrues over time based on the vault’s performance.
   
   
3. Withdrawing Funds
   Users redeem their receipt tokens to withdraw their share of the vault’s holdings. The vault calculates the net asset value of the deposited funds and distributes withdrawals accordingly.

Liquidity Management in Nest Vaults

Liquidity management is critical to ensuring that users can deposit and withdraw funds at any time without major delays or price slippage. Nest vaults are designed to maintain a balance between yield generation and liquidity availability.

How Nest Ensures Liquidity for Withdrawals

Vaults follow several mechanisms to ensure users can withdraw funds when needed:

• Instant liquidity pools
  A portion of vault assets is always kept in highly liquid stablecoins, allowing for quick withdrawals without needing to sell any other assets.
  
  
• Automated liquidation
  When withdrawal requests exceed liquid reserves, the vault automatically redeems a portion of its yield-generating assets to cover the outflow.
  
  
• Staggered redemptions
  Some vaults hold fewer liquid assets, such as private equity or tokenized solar fields. These require longer withdrawal windows, and vaults manage redemptions in scheduled batches.

Managing Large Deposits and Withdrawals

Nest vaults are structured to handle large-scale deposits and withdrawals efficiently, making them suitable for both retail users and institutions.

• High deposit capacity
  Institutional users and whales can deposit hundreds of millions of dollars into a vault without affecting yield efficiency.
  
  
• Cross-chain liquidity access
  Plume’s SkyLink SkyLink lets users on other chains to deposit stablecoins into Nest vaults that generate yield on Plume, allowing for a smooth omnichain experience.

How Nest Vaults Are Internally Structured

Nest vaults leverage Nucleus's battle-tested 'Boring' vault framework, a standard proven with billions in Total Value Locked (TVL), to provide secure asset management while enabling cross-chain capabilities with Plume’s Skylink.

This framework has four main contracts that provide a flexible, scalable, and efficient way to manage deposits, withdrawals, and yield strategies while ensuring security and transparency:

• Secure Asset Custody
  The ‘BoringVault’ contract holds all deposited assets and ensures that withdrawals match the vault’s available liquidity.
  
  
• Managing Deposits and Withdrawals
  The ‘Teller’ contract is responsible for issuing and burning receipt tokens when users deposit and withdraw funds. It also interacts with cross-chain bridges for multi-chain vault access.
  
  
• Valuation and Net Asset Value Calculation
  The ‘Accountant’ contract ensures that the vault accurately calculates the value of its holdings, providing users with transparent yield and withdrawal amounts.
  
  
• Fund Allocation and Liquidity Optimization
  The ‘Manager’ contract oversees strategy decisions, ensuring that the vault:
  
  • Allocates capital to stable yield sources while maintaining liquid reserves;
  • Dynamically adjusts asset allocations based on market conditions;
  • Reduces withdrawal delays by managing available liquid assets efficiently.

Cross-Chain Liquidity with SkyLink

To improve liquidity and accessibility, Nest vaults integrate Plume’s SkyLink, which allows yield to be distributed across 18+ blockchains and rollups such as Solana, Movement, Injective, and Omni Network:

• Cross-chain yield distribution
  Users can deposit on one chain and receive their yield on another.
  
  
• LayerZero-powered bridging
  Vaults remain on a primary chain while users interact with them from different networks.
  
  
• Liquidity preservation
  Ensures that vaults maintain sufficient assets on each chain while preventing fragmentation.

This structure eliminates liquidity bottlenecks, making it easier for users to access their funds and yields across different blockchain ecosystems.

Why Use a Nest Vault?

Nest vaults offer a structured, automated way to earn yield with several unique benefits:

• Users get fast, predictable liquidity
  Large amounts can be withdrawn without major delays, and without disrupting vault operations.
  
  
• Easier access with cross-chain interoperability
  Nest vaults can function seamlessly across multiple blockchain ecosystems, so that users can deposit on one blockchain and receive yield on another.
  
  
• Institutions can allocate funds in a compliant manner
  Nest vaults support segregated LP vaults, ensuring compliance with strict mandates such as OFAC sanctions, and chain-level Anti-Money Laundering (AML) via Plume's sequencer-level screening.
  
  
• Automated management reduces risks
  Funds are dynamically allocated in a smart contract-controlled structure with real-time valuation, eliminating human error while maximizing yield efficiency.

Who is Nest For?

Nest vaults cater to both retail and institutional users, by combining structured asset management with liquidity optimization through Nucleus's vault framework and Plume’s SkyLink.

These vaults provide stable yields from tokenized real world assets like treasuries, ETFs, and bonds, and possibly in the future some higher-yielding, but more volatile, crypto-native strategies such as staking and liquidity provision.

Retail vaults offer diversified strategies accessible to all, while institutional vaults provide segregated fund management for large users, ensuring secure custody and efficient cross-chain access.