ICHI Docs v3
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Angel Vaults
Helping projects stay comfy during the crypto winter. It's time to stop putting your token up for sale.

Overview

Angel Liquidity Vaults are a Uniswap v3 liquidity management protocol created for projects to build a treasury of Protocol-Owned Liquidity (POL) and DeFi users to earn better fees without having to manage their pool positions.
Liquidity is the lifeblood of crypto but normal liquidity pools come with a significant cost: the project’s strongest supporters are putting their tokens up for sale. They must deposit the project’s token on an exchange to provide liquidity in order for someone else to buy it. ICHI Angel Vaults provide the necessary liquidity without selling your token.
ICHI Angel Vaults help projects protect their token price in bear markets. When paired with Branded Dollars, they empower communities to have ownership of their own liquidity, which is essential for any decentralized financial system.
ICHI Angel Vaults combine the rewarding and simple experience of Uniswap V2 with the concentrated liquidity of Uniswap V3. This means that liquidity providers earn more fees without having to actively manage the price ranges of their positions. In addition to providing liquidity providers the opportunity to earn higher trading fees, Angel Vaults also provide a number of features that benefit the projects that establish them, including:

Buy Liquidity

  • Providing single asset liquidity underneath the price of a participating project’s token increases the price of that token.

Deflationary Liquidity Rewards

  • By creating branded dollars through ICHI and then establishing an Angel Vault with that branded dollar, crypto projects can offset the cost of liquidity rewards. This is due to the upward price pressure created from locking the community’s scarce token when minting its branded dollar and then using it as the single asset deposited in the Angel Vault.

Protocol Owned Liquidity (POL)

  • Depositing a portion of the assets backing that project’s branded dollar into the Angel Vault creates sustainable, long-lasting liquidity.
ICHI’s Angel Vaults are the easiest and most cost effective way for projects to increase their liquidity floor, enabling:
  • LPs to earn more trading fees with less,
  • Liquidity rewards to increase the amount of buy side liquidity without also incentivizing sell pressure,
  • The inflationary cost of rewards to be offset by the deflationary minting of the project’s branded dollar, and
  • Projects to build assets under management (AUM) backing their branded dollar.

Example

The first Angel Vault is a $oneUNI/$ICHI vault where users only deposit $oneUNI (single-sided liquidity). The $oneUNI is deposited on the buy-side of the $ICHI token. This liquidity becomes a 'buyer of last resort' which protects the token price from falling.

Angel Vaults Tutorials

COMING SOON - We tip community members who create ICHI app walkthroughs and tutorials. If you are interested in becoming a contributor, reach out on the ICHI Discord.

FAQs

What is an “Angel Vault”?

An Angel Vault is a Uniswap v3 liquidity management protocol and the most successful liquidity strategy in DeFi to date. It allows a protocol to allocate stable assets directly under the price of a project token, supporting the protocol and allowing LPs to enjoy the lucrative experience of concentrated liquidity.

How does it work?

AVLPs use Uniswap v3 concentrated liquidity to establish a wall of "buyers of last resort" directly under the price of a project token. This continually establishes new price floors, because of rebalancing, and protects project tokens against market downturn, as long as the angel vault is large enough in comparison to market cap.

Why would I want one? Protects the price and earns money

When an asset has the majority of their liquidity paired with Ethereum, they become exposed to the upside as well as downside of $ETH market volatility. With an Angel Vault, protocols can utilize their own branded dollar, or another stablecoin, to build a buy-wall of liquidity to protect their token’s price. Thanks to UNI v3 tickers and concentrated liquidity. Since the deployment of ICHI’s angel vault, the price has been completely unaffected by market downturn, while still being able to enjoy market upside.

What does the IRR metric on the Angel Vault page represent?

IRR stands for Internal Rate of Return which is defined on Investopedia as the profitability of potential investments. In the ICHI Vault system, the IRR provides a representation of the performance of the vault from inception (meaning an account of its past performance). Due to the fact that it takes into account the past performance of the vault, it is not a perfect representation of future earnings but stands to illustrate what is likely/has been the case until the current date. Additionally, with ICHI's vote for IRR enhancements, the ICHI Foundation will guarantee IRR minimums over the first 6 months of a vault's lifespan.

How do vaults profit/create a positive Internal Rate of Return (IRR)?

This is dependent on many different factors. The IRR is a mixture of earned fees from Uniswap v3 (based on volume of trades in that pool), rebalances, price of the protected asset, and amount of liquidity deposited to the vault. The ICHI UI displays IRR for projects that hit the minimal threshold for Minimum Vault Strength as seen on the Vault Metrics page.

How many types of tokens are deposited into a vault?

The angel vault takes single-sided deposits (usually of a dollar pegged asset) which we call the deposit token. The vault is named after the deposit token and uses that token to provide price protection for the other token in the pool known as the paired token.

How is initial liquidity supplied to the pool?

The Uniswap v3 pool that is created for the angel vault to deposit to is made up of the deposit token and the paired token. Initial liquidity should be deposited at the creation of the pool and spread across the entire range.

How often do rebalances happen? Are they automated?

Rebalances happen on an as-needed basis. They are monitored by automated software but manually pinged. This will be a fully automated process in the coming months and more information about rebalance strategies will be described in these docs soon.

Who rebalances the vault?

At the moment ICHI governance has been rebalancing vaults for partner projects due to the complexity. In the future, this will be automated and up to the Partner project to ping the contract when wanting a rebalance to occur.

What are the benefits of using a Branded Dollar in a vault vs. USDC?

Offsets liquidity rewards provided for angel vaults as users mint Increased demand to provide Angel Vault Liquidity translates to additional scarce crypto locked in treasury Converts TVL into POL through usage of Treasury funds For every $1 of liquidity added to the vault, $1.20-1.50 of value is locked for the protocol oneTokens drive more protocol-owned liquidity and assets under management for a protocol. Both are increased due to Decentralized Monetary Authority technology that provides a project with its own massively over-collateralized stable asset. This collateral can be managed and put to work with DeFi strategies as the DMA managers best see fit.
What are the risks of using an Angel Vault?
Angel Vaults are highly risky as they allow for single sided liquidity deposits, and use those to deposit to a liquidity pool. This means deposits are subject to all risks of providing liquidity on an Automated Market Maker (AMM) including but not limited to Impermanent Loss, loss of all funds due to a hack of the contract, negative IRRs, etc. Please do your own research before depositing.