Reserve Fund

Revenue Allocation and Yield Distribution

Avant strategically allocates its financial resources to maximize security and efficiency. The Avant Protocol takes a cut from yield generated to cover operational expenses, including the reserve fund. For example, if the strategy yield is 50%, and the fee 10%, the user receives 45%, while 5% goes to Avant. This approach ensures that Avant can sustain and grow its operations while users still receive a highly competitive return on their investments.

Distribution Mechanics

For avUSD that is not staked (plain avUSD), a portionof the potential yield that could have been earned if staked is redirected to Avant's operation.

Reserve Fund Contributions

At Avant, security is our highest priority. To protect users and their assets, we’ve established a robust Reserve Fund as a critical financial safeguard. Initially, 100% of the revenue from both our operational yield cut and the redistribution from unstaked avUSD goes entirely into this fund, which will also be supplemented by funds raised by Avant.

The Reserve Fund is meticulously designed to mitigate potential losses from unforeseen events like DeFi exploits, smart contract vulnerabilities, or systemic failures. By proactively allocating resources, we ensure users’ assets are protected even in adverse conditions, reinforcing trust and stability within our platform.

In addition, if there is ever a negative-yielding week, the Reserve Fund can step in to cover shortfalls, helping maintain a stable return profile for users. This provision ensures that our community benefits from a more predictable yield environment, further instilling confidence in Avant’s commitment to value preservation.

Reserve Fund Growth & Management

Contributions to the Reserve Fund are held in highly liquid stablecoins, providing immediate accessibility when needed. To further enhance the fund’s capacity without compromising security, these assets may be prudently deployed in secure DeFi protocols—allowing the fund to grow while maintaining liquidity and minimizing risk. This underscores our security-first approach, ensuring the protection of our users’ assets is always a top priority.