Protocol Architecture

Key Components

1. VestoPool: The core contract that:

   • Manages the creation and redemption of derivative tokens
   • Maintains asset weights and nominal units
   • Handles single-asset entries through swap integrations
   • Interfaces with the VestoStrategy for yield generation

2. VToken: The ERC20 token representing the derivative itself, which:

   • Implements standard token functionality
   • Can only be minted/burned by the authorized VestoPool

3. VestoStrategy: The yield-generating component that:

   • Manages deployment of assets to lending protocols
   • Tracks user shares and accrued yield
   • Handles withdrawal requests from the pool

4. VestoOracle: Provides reliable price data for:

   • Valuing collateral assets
   • Calculating appropriate issuance and redemption amounts
   • Determining swap rates for single-asset entries

Integration Points

• Aave Protocol: Currently the primary yield source through lending markets
• Uniswap V3: Enables single-asset entries by facilitating token swaps
• Chainlink Oracles: Provides secure price feeds for all supported assets

Visual Flow Diagram

This architecture enables Vesto to offer a unique combination of derivative exposure and yield generation, all while maintaining security and capital efficiency.