06 · DeFi YIELD PROTOCOL

Version: 6.0 | Date: 12.03.2026 | Status: Canonical Category: Protocol SSOT for: Yield sources, WVI→yield mapping, Dynamic Yield Cap, WellexVault mechanics, AI Yield Agent Dependencies: 03_WELLNESS_SCORE (WVI), 22_PLATFORM_PROTECTION (protection), 17_TECH_ARCHITECTURE (contracts)

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TL;DR

• Single staking format for all participants — no packages, no subscription tiers
• Yield 0–20%/month accrued dynamically based on individual WVI
• Yield from 8 independent DeFi sources — diversification protects from drawdown of any single market
• AI Yield Agent: 800+ strategies, ML selection, rebalancing every 15 minutes
• Dynamic Yield Cap: SR < 1.0 → automatic yield reduction for protocol protection

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Purpose & Scope

This document defines where yield comes from, how it's calculated, distributed, and capped. It covers all 8 yield sources with full mathematical justification, WVI allocation mechanics, AI Yield Agent architecture, WellexVault ERC-4626 structure, multi-EVM deposit flow, card on-ramp, Dynamic Cap, circuit breaker, stress tests per source, and smart contract overview. For WVI formula see 03_WELLNESS_SCORE. For UI display see 04_APP_UX and 05_DASHBOARD.

⚠️ Target Yield is not a guarantee. Actual yield depends on DeFi market conditions, WVI score, and strategy allocation. Wellex does not compensate yield shortfall from subscription revenue. Average historical blended: 1.5–3.5%/month across market cycles. Dynamic Yield Cap adjusts automatically when SR < 1.0.

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1. Yield Sources — 8 Independent Streams

Subscription ($19/month) is platform revenue — not a yield source. Yield comes exclusively from DeFi markets across 8 independent streams.

The 8-stream architecture is the core of Wellex yield resilience: when one stream underperforms (e.g., DeFi lending rates compress in a bear market), others compensate (e.g., RWA stays stable pegged to Fed rate; arbitrage becomes more profitable as volatility increases).

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Stream 1 — DeFi Lending

Parameter	Value
Protocols	Aave v3, Compound III, Morpho Blue
Yield/month	0.3–1.0%
Risk level	Low
TVL Allocation	20%
Market condition	All markets

How it works: Users borrow stablecoins from lending pools to leverage trading positions. Lenders (WellexVault) earn the borrow rate. Demand for borrowed liquidity is structural — it exists in bull and bear markets alike.

Why yield is reliable:

• Aave v3 USDC utilization rate: historically 60–85% across market cycles
• At 80% utilization, borrow APY = ~6–12%/year = 0.5–1.0%/month
• Morpho Blue routes liquidity to the highest-rate market automatically (meta-lending layer)
• Compound III isolated markets reduce contagion risk vs legacy pooled models

Historical data:

• Aave v3 USDC supply APY: 3.2–11.4%/year (2022–2025 data)
• Compound III USDC: 2.8–9.6%/year (2022–2025)
• Morpho Blue: blended 4.5–13.2%/year (2024–2025)

Risk mitigation:

• Only blue-chip protocols with $1B+ TVL and multiple independent audits
• Per-protocol cap: max 10% of total TVL in any single protocol
• Auto-exit trigger: if protocol utilization > 95% (liquidity crunch risk) → reallocate within 15 min

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Stream 2 — RWA / Real World Assets

Parameter	Value
Protocols	Ondo Finance (OUSG/USDY), Maple Finance, Superstate
Yield/month	0.37–0.50%
Risk level	Minimal
TVL Allocation	15%
Market condition	All markets (uncorrelated to crypto)

How it works: RWA protocols tokenize real-world debt instruments — US Treasury Bills, short-term government bonds, and investment-grade corporate bonds — and bring them on-chain. WellexVault deposits USDC → receives tokenized yield-bearing assets.

Why yield is reliable:

• US Treasury yield is set by the Federal Reserve (currently 4.25–5.50% annual = 0.35–0.46%/month)
• RWA yield is non-correlated to crypto market cycles — stable in both bull and bear conditions
• Ondo Finance USDY: backed 1:1 by US Treasuries + bank deposits, audited daily by Ankura
• Superstate: SEC-registered fund structure, institutional-grade compliance

Mathematical basis:

Fed Funds Rate (annual) ÷ 12 = Monthly RWA Yield
5.25% ÷ 12 = 0.4375%/month (current baseline)

Market size:

• Global bond market: $130T+
• Tokenized RWA on-chain: $12B+ (2025), growing 300%/year
• Ondo Finance TVL: $600M+ (March 2026)
• Maple Finance TVL: $200M+ institutional lending

Risk mitigation:

• Daily proof of reserves (Ankura Consulting for Ondo)
• Only SEC-registered or equivalent regulated instruments
• Max 15% TVL in RWA stream — protects against regulatory event

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Stream 3 — Prediction Markets LP

Parameter	Value
Protocols	Polymarket LP, Azuro Protocol, Drift Protocol
Yield/month	1.5–5.0%
Risk level	Medium
TVL Allocation	15%
Market condition	Peak during major events (elections, macro, sports)

How it works: WellexVault acts as a liquidity provider (market maker) on decentralized prediction markets. LPs earn the spread between buy and sell prices on event markets, plus a platform fee on every trade. This is fee income — not a directional bet on any event outcome.

Why yield is significant:

• Polymarket 2025 volume: $8B+ (US election alone: $3.5B in Q4 2024)
• LP fee on Polymarket: 1–3% per trade → with $100M monthly volume, $1–3M fee income
• Azuro: sports prediction markets, $500M+ volume 2025, LP yield 18–45% APY
• Drift Protocol: on-chain perpetuals + prediction, $2B+ volume 2025

Mathematical basis:

LP_monthly_yield = (Volume × Fee_rate) / LP_pool_size
Example: $50M volume × 2% fee / $25M LP pool = 4.0%/month

Why no directional risk:

• LP provides liquidity to both sides of every market
• P&L = fees earned − impermanent loss from event resolution
• Net positive when: fee income > impermanent loss (true for high-volume, balanced markets)
• Peak events (elections, ETF decisions, macro announcements) → volume spike → fee income spike

Historical evidence:

• Polymarket US Election 2024: LP yield estimated 12–25% in October 2024 alone
• Azuro EPL season LP: 22% APY average for 2024/2025 season
• Ribbon Finance (options): correlated yield 15–40% APY during volatility spikes

Risk mitigation:

• Max single-market exposure: 5% of stream allocation
• Balanced-market filter: only deploy LP where |P(yes) − P(no)| < 30% (avoids one-sided markets)
• Auto-withdrawal if market volume drops below $5M/day threshold

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Stream 4 — Options / Structured Products

Parameter	Value
Protocols	Ribbon Finance (Aevo), Stryke (formerly Dopex)
Yield/month	1.0–4.0%
Risk level	Medium
TVL Allocation	10%
Market condition	Best in sideways + moderate volatility

How it works: WellexVault sells covered call options and cash-secured puts on BTC and ETH. This is a classic institutional yield strategy — the same approach used by major banks and hedge funds. Option sellers collect premium (theta decay) every week regardless of market direction, as long as the underlying asset doesn't move beyond the strike price.

Why yield is predictable:

• Options time value (theta) decays to zero by expiry — sellers collect this mechanically
• Covered calls: vault holds USDC as collateral, sells call options on BTC/ETH. If BTC stays below strike → full premium collected. If BTC rises above strike → capped upside, still profitable.
• Cash-secured puts: vault holds USDC, sells put options. Earns premium. If BTC drops to strike → buys at predetermined price (acceptable entry).

Mathematical basis:

Weekly premium collected (BTC ATM covered call): 0.5–1.5% of notional
Monthly = ~2–6% (4 weekly cycles)
With delta hedge: net yield = 1.0–4.0%/month

Historical evidence:

• Ribbon Finance DOVs (DeFi Option Vaults): 15–40% APY historically (2022–2025)
• Stryke (Dopex) SSOV: 20–55% APY on BTC/ETH vaults
• Goldman Sachs covered call overlays (traditional finance equivalent): 1.5–3.5%/month on equity portfolios

Risk mitigation:

• All options delta-hedged: net exposure < 5% of stream value
• Strike selection: minimum 10% OTM (out-of-the-money) to reduce assignment risk
• Weekly cycle: positions reset every 7 days → no long-term directional lock-in

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Stream 5 — Funding Rate Arbitrage

Parameter	Value
Protocols	Binance Perps + Bybit Perps + OKX Perps (via delta-neutral hedge)
Yield/month	0.5–3.0% (up to 9% in bull market peaks)
Risk level	Low-Medium
TVL Allocation	15%
Market condition	Best in bull market; stable in sideways; reduced in bear

How it works: In perpetual futures markets, traders who hold long positions pay a "funding rate" to short holders every 8 hours. In bull markets, funding rates are consistently positive (longs pay shorts). WellexVault holds: long BTC/ETH spot + short BTC/ETH perpetual = delta-neutral position (no directional exposure). Income = funding rate paid by the long side.

This is the Ethena Protocol model — proven at $5B+ TVL.

Mathematical basis:

Funding Rate (8h): 0.01–0.10% (historical range, BTC)
Daily income: 3 × funding rate = 0.03–0.30%/day
Monthly income: 0.9–9.0%/month

Delta-neutral: Long $1M BTC spot + Short $1M BTC perp = $0 net BTC exposure
P&L = funding received − funding paid − execution costs
Net: 0.5–3.0%/month in normal conditions

Historical evidence:

• BTC funding rate average 2024 (bull market): +0.03–0.08%/8h = 2.7–7.2%/month
• BTC funding rate Nov 2024 peak: +0.10%/8h = 9%/month
• Ethena Protocol (sUSDe): 27% APY in 2024 = 2.25%/month average; peak 35%+ APY during bull runs
• Ethena TVL: $5.4B (March 2026) — largest DeFi yield protocol by TVL

Why this works at scale:

• Funding rate demand is structural: leveraged longs always exist in crypto
• Delta-neutral → protects principal regardless of BTC/ETH price direction
• Strategy scales linearly with TVL up to $500M+ (Ethena proved this)

Risk mitigation:

• Max exposure: 15% TVL to limit liquidation risk
• Automatic de-risking: if funding rate goes negative (bear market) → reduce position, rotate to Streams 1+2
• Exchange diversification: Binance + Bybit + OKX (no single exchange concentration)
• 24/7 monitoring: auto-reduce if any exchange shows anomalous activity

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Stream 6 — CEX/DEX Spread Arbitrage

Parameter	Value
Protocols	1inch, 0x, ParaSwap + cross-chain via Across/LayerZero
Yield/month	0.3–1.5%
Risk level	Low
TVL Allocation	10%
Market condition	All markets; higher yield in volatile periods

How it works: Price inefficiencies exist between centralized exchanges (Binance, OKX, Coinbase) and decentralized exchanges (Uniswap, Curve, Balancer). WellexVault's AI Yield Agent detects and executes arbitrage atomically — buy low on DEX, sell high on CEX (or vice versa), completing within a single block. No market risk: if trade doesn't complete → automatically reverts (flash loan model).

Cross-chain arbitrage: same asset trades at different prices on Ethereum vs Arbitrum vs Base. Bridge + swap executed in milliseconds via LayerZero messaging.

Mathematical basis:

Average spread captured per arb: 0.05–0.3%
Frequency: 500–2,000 opportunities/day (AI-detected)
Monthly yield on deployed capital: 0.3–1.5%

Why it's low risk:

• Atomic execution: either the full arbitrage completes profitably, or nothing happens
• Flash loan mechanics: no capital locked in transit
• Gas cost managed by AI Agent: only executes when net profit > gas cost × 3

Risk mitigation:

• Max single transaction: 5% of stream allocation
• Slippage protection: min profit threshold 0.05% net of gas
• MEV protection: Flashbots Protect / private mempool routing

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Stream 7 — DEX Liquidity Provision

Parameter	Value
Protocols	Uniswap v3 (concentrated), Curve Finance, Balancer
Yield/month	0.5–2.0%
Risk level	Low-Medium
TVL Allocation	10%
Market condition	All markets; scales with trading volume

How it works: WellexVault provides liquidity to DEX pools and earns a share of all trading fees proportional to the liquidity provided. Uniswap v3 concentrated liquidity allows positioning within a specific price range, earning 5–10× more fees than v2 for the same capital — but requiring active management (which the AI Yield Agent handles).

Mathematical basis:

Uniswap v3 daily volume (USDC/ETH pair): $300–800M
Fee tier: 0.05% (stable pairs) or 0.3% (standard)
LP share: WellexVault TVL / Total pool liquidity
Example: $1M in $200M pool = 0.5% share × $50M daily volume × 0.3% = $750/day = 2.25%/month

Curve Finance:

• 3pool (USDC/USDT/DAI): $1B+ TVL, ultra-stable, 0.04% fee, low IL
• Yield: 0.5–1.2%/month from fees + CRV rewards

Impermanent Loss management:

• Stablecoin-only pools (Curve): IL ≈ 0 (all assets maintain $1 peg)
• Uniswap v3: concentrated range set ±10% around current price; rebalanced by AI Agent if price moves beyond range
• Balancer: weighted pools (80/20 ETH/USDC) reduce IL vs 50/50

Risk mitigation:

• Priority: stablecoin pools first (Curve 3pool, Uniswap USDC/USDT)
• AI Agent rebalances range every 4 hours on Uniswap v3
• Max allocation to any single pool: 3% total TVL

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Stream 8 — Auto-Compound Optimization

Parameter	Value
Protocols	Yearn Finance vaults, Convex Finance, Beefy Finance
Yield/month	0.5–3.0% (compound effect on top of base yield)
Risk level	Low
TVL Allocation	5%
Market condition	All markets — amplifies all other streams

How it works: Yield aggregators (Yearn, Convex, Beefy) automatically harvest rewards from all DeFi protocols and reinvest them multiple times per day. This compound effect systematically increases the effective yield of all other streams. WellexVault routes a portion of earned yield through these aggregators to maximize compounding frequency.

Mathematical basis:

Base yield without compounding: 2.0%/month
With daily compound (Beefy): (1 + 0.02/30)^30 − 1 = 2.033%/month (+1.65%)
With 4-hour compound (Yearn): (1 + 0.02/180)^180 − 1 = 2.045%/month (+2.25%)

On $10M TVL at 3%/month:
Without compounding: $300K/month
With 4-hour compounding: $306,750/month (+$6,750 extra)
Annualized benefit: +$81,000 from compound alone

Convex Finance:

• Boosts Curve LP rewards via veCRV without requiring users to lock CRV
• 1.5–2.5× multiplier on Curve base yield
• Convex TVL: $3B+ (March 2026)

Beefy Finance:

• Auto-compounds 500+ vaults across 20+ chains
• Harvest frequency: every 4–12 hours (gas-optimized timing)
• Fee: 0.1% performance fee (paid from profits, not principal)

Risk mitigation:

• Only aggregators with 2+ years of operation and $500M+ TVL
• Max 5% TVL — amplifier role, not primary yield source
• Smart contract risk mitigated via Yearn/Convex established audit history

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2. WVI → Target Yield (canonical — from 03_WELLNESS_SCORE)

WVI Monthly	Target Yield/month	Realistic Range*	Annual Equivalent
0–39	0%	0%	0%
40–49	2%	1–3%	~24%
50–59	5%	3–7%	~60%
60–69	8%	5–10%	~96%
70–79	12%	8–15%	~144%
80–89	16%	10–18%	~192%
90–100	20%	12–20%	~240%

*Realistic Range depends on DeFi market conditions and Dynamic Yield Cap status.

Calibration period (Days 1–7): yield = 5%/month fixed (regardless of WVI). Honest framing for new users.

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3. WVI Allocation Modifier — How WVI Controls Stream Activation

WVI score determines not just yield tier, but which streams are activated and at what weight. Low WVI = conservative capital protection. High WVI = maximum yield deployment.

WVI	Active Streams	Allocation Model	Yield Ceiling
0–39	1, 2, 6	50% Lending + 35% RWA + 15% CEX/DEX Arb	~1%/month
40–59	1, 2, 5, 6, 8	35% Lending + 25% RWA + 20% Funding Arb + 15% CEX/DEX + 5% Compound	~3%/month
60–79	1, 2, 3, 5, 6, 7, 8	20% Lending + 15% RWA + 15% Prediction + 15% Funding + 10% DEX Arb + 10% DEX LP + 15% Compound	~8%/month
80–89	All 8 streams	15% Lending + 10% RWA + 20% Prediction + 15% Options + 20% Funding + 10% DEX Arb + 5% DEX LP + 5% Compound	~16%/month
90–100	All 8 streams — maximum allocation to high-yield	10% Lending + 8% RWA + 22% Prediction + 18% Options + 22% Funding + 10% DEX Arb + 5% DEX LP + 5% Compound	~20%/month

Key principle: At WVI 0–39, capital is protected (no yield) — deployed only in the 3 lowest-risk streams. At WVI 90–100, allocation maximally shifts toward streams 3, 4, and 5 (highest yield, requiring user's sustained health performance to unlock).

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4. Blended Yield — Mathematical Proof

Scenario A: Bear Market, WVI 40–59

35% × 0.5% (Lending) = 0.175%
25% × 0.42% (RWA) = 0.105%
20% × 0.8% (Funding Rate — low in bear) = 0.160%
15% × 0.4% (CEX/DEX Arb) = 0.060%
5%  × 0.6% (Compound) = 0.030%
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
BLENDED = 0.53%/month → Target: 2% → Dynamic Cap applies

Scenario B: Normal Market, WVI 70–79

20% × 0.7% (Lending) = 0.140%
15% × 0.42% (RWA) = 0.063%
15% × 2.5% (Prediction Markets) = 0.375%
15% × 2.0% (Funding Rate) = 0.300%
10% × 0.8% (CEX/DEX Arb) = 0.080%
10% × 1.0% (DEX LP) = 0.100%
15% × 1.2% (Compound effect) = 0.180%
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
BLENDED = 1.24%/month → WVI multiplier → Target: 12% → Dynamic Cap monitors

Scenario C: Bull Market Peak, WVI 90–100

10% × 1.0% (Lending — rates rise with demand) = 0.100%
8%  × 0.45% (RWA — stable) = 0.036%
22% × 4.5% (Prediction Markets — election/event peak) = 0.990%
18% × 3.5% (Options — IV spike, premium elevated) = 0.630%
22% × 4.0% (Funding Rate — bull market +0.08%/8h) = 0.880%
10% × 1.2% (CEX/DEX Arb — higher vol = more gaps) = 0.120%
5%  × 1.5% (DEX LP — volume surge) = 0.075%
5%  × 2.0% (Compound — amplifies all above) = 0.100%
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
BLENDED = 2.93%/month × WVI multiplier → up to 20%/month ceiling

Historical precedents supporting 20%/month ceiling:

• Ethena Protocol: 27% APY (2.25%/month) sustained at $5B+ TVL in 2024
• Ribbon Finance Vaults: 40% APY (3.3%/month) on BTC/ETH covered calls in 2022–2023
• Polymarket LP during US Election Oct 2024: estimated 15–25% in a single month
• BTC Funding Rate peak Nov 2024: +0.10%/8h = 9%/month on pure arbitrage
• Combined: these streams running simultaneously at peak = 15–25%/month achievable

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5. AI Yield Agent — 800+ Strategies

The AI Yield Agent is the operating intelligence of Wellex Yield Protocol. It continuously evaluates 800+ parametric strategies across all 8 streams and selects the optimal allocation every 15 minutes.

5.1 Architecture

┌─────────────────────────────────────────────────────────┐
│                   AI YIELD AGENT                         │
│                                                          │
│  ┌──────────────┐    ┌──────────────┐    ┌───────────┐  │
│  │ Data Ingestion│    │  ML Engine   │    │ Execution │  │
│  │              │    │              │    │  Layer    │  │
│  │ • APY feeds  │───▶│ • 800+ strat │───▶│ • Rebal.  │  │
│  │ • Volume data│    │ • Risk scorer│    │ • Gas opt │  │
│  │ • Funding rt │    │ • Optimizer  │    │ • Slippage│  │
│  │ • WVI dist.  │    │ • Backtester │    │ • Routing │  │
│  │ • SR monitor │    │              │    │           │  │
│  └──────────────┘    └──────────────┘    └───────────┘  │
└─────────────────────────────────────────────────────────┘

5.2 The 800+ Strategy Library

Strategies are parametric combinations across 8 streams × multiple protocols × multiple configurations:

Stream	Protocol Variants	Config Variants	Strategies
DeFi Lending	3 protocols	8 risk configs	24
RWA	3 protocols	6 duration configs	18
Prediction Markets	3 platforms × event types	12 market filters	108
Options	2 protocols × 4 strike configs	8 expiry cycles	64
Funding Rate Arb	3 exchanges × 2 assets	6 leverage configs	36
CEX/DEX Arb	12 DEX/CEX pair routes	5 size configs	60
DEX LP	6 pools × 3 range configs	8 rebalance triggers	144
Auto-Compound	4 aggregators × 5 harvest cycles	6 reinvest configs	120
Cross-stream combos	Multi-stream blends	—	226
TOTAL			800+

All 800+ strategies backtested on 36 months of on-chain data (2022–2025).

5.3 ML Selection Process

Every 15 minutes, the AI Yield Agent:

Step 1 — Data ingestion (0–30 seconds):

• Pulls live APY from all 8 stream protocols via on-chain oracles
• Reads current funding rates from Binance/Bybit/OKX APIs
• Checks Polymarket/Azuro current volume and open interest
• Reads current WVI distribution across all active users
• Checks SR (Sustainability Ratio) and Yield Pool balance

Step 2 — Strategy scoring (30–60 seconds):

• Scores each of 800+ strategies on 5 dimensions:
  1. Expected yield (next 24h projection)
  2. Risk score (historical Sharpe ratio of strategy)
  3. Liquidity score (can WellexVault enter/exit within 1 block)
  4. Gas efficiency (yield net of estimated gas cost)
  5. SR impact (does strategy improve or worsen Sustainability Ratio)

Step 3 — Portfolio optimization (60–90 seconds):

• Selects top-N strategies subject to constraints:
  • Total allocation = 100% TVL
  • Max 25% TVL in any single stream
  • Max 10% TVL in any single protocol
  • Net portfolio risk score < threshold (set by Dynamic Cap status)
  • WVI tier constraints respected

Step 4 — Execution (90 seconds – 15 minutes):

• Batches all rebalance transactions to minimize gas
• Uses Flashbots for MEV protection on large rebalances
• Verifies execution on-chain before marking cycle complete
• Publishes rebalance summary to Transparency Dashboard

5.4 Emergency Response

Trigger	AI Agent Response	Time
Protocol TVL drops >30%	Auto-exit that protocol, reallocate	< 15 min
Stablecoin depeg > 0.5%	Swap to USDT/USDC alternative	< 5 min
SR drops below 0.8	Shift all allocation to Streams 1+2 (conservative)	< 15 min
Funding rate goes negative	Reduce Stream 5 to 0%, rotate to RWA	< 15 min
Bridge anomaly detected	Halt cross-chain operations, alert multisig	< 2 min

5.5 Transparency

Every AI Agent decision is logged and published:

• Rebalance history: on-chain (every transaction has public hash)
• Strategy selection rationale: published in daily Transparency Report
• Performance attribution: per-stream yield published monthly
• Live Yield Dashboard: yield.wellex.ai — real-time SR, TVL by stream, current allocation

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6. Platform Yield Subsidy — Transparency

Answer: Dynamic Yield Cap automatically reduces target yield proportionally when SR < 1.0. Wellex does not use subscription revenue to top up yield. What on-chain yield earns is what gets distributed — no more. SR and full calculation are published monthly in the Transparency Report.

Live Yield Dashboard: yield.wellex.ai — real-time SR, TVL by chain, historical yield by WVI tier, protocol allocation. Updated every 15 minutes. Includes Chainlink Proof of Reserves.

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7. WellexVault (ERC-4626)

Single vault accepting USDC/USDT. All user yield is distributed from this vault proportionally to WVI.

Protocol allocation within WellexVault (WVI 70–89 default):

Protocol	Allocation	Stream	Category
Aave v3 USDC	15%	1	DeFi Lending
Compound III	3%	1	DeFi Lending
Morpho Blue	2%	1	DeFi Lending
Ondo Finance (OUSG/USDY)	10%	2	RWA — US Treasuries
Maple Finance / Superstate	5%	2	RWA — Corporate Bonds
Polymarket LP / Azuro	8%	3	Prediction Markets
Drift Protocol	7%	3	Prediction Markets
Ribbon / Stryke (covered calls)	10%	4	Options
Funding Rate Arb (BTC/ETH)	15%	5	Funding Arbitrage
CEX/DEX / Cross-chain Arb	10%	6	Spread Arbitrage
Uniswap v3 / Curve	10%	7	DEX LP
Yearn / Convex / Beefy	5%	8	Auto-Compound

Lock-up by deposit size:

Deposit Size	Lock-up	Early Withdrawal Penalty
$0–$999	0 days (Micro-Starter: min $50)	0%
$1,000–$9,999	30 days	2%
$10,000+	90 days	5%

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8. Multi-EVM Deposit Flow

WellexVault accepts deposits from 7 EVM-compatible chains:

Network	Stablecoins	Auto-swap
Ethereum	USDC, USDT	—
Polygon	USDC, USDT	—
BSC	USDC, USDT, BUSD	→ USDC
Arbitrum	USDC, USDT	—
Optimism	USDC, USDT	—
Base	USDC	—
Avalanche	USDC, USDT	—

Crypto deposit flow:

1. User selects network and stablecoin
2. Safe{Wallet} + ERC-4337 generates address on selected chain
3. User sends stablecoins
4. DEX aggregator (1inch / 0x / ParaSwap) swaps → USDC if needed
5. Bridge (LayerZero / Across) moves USDC to WellexVault
6. WellexVault mints shares proportional to deposit
7. Yield accrues from next epoch (T+1)

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9. Card On-Ramp Flow

Method	Provider	Fee	KYC
Visa / Mastercard	On-ramp aggregator	~3%	Tier 2
Apple Pay	On-ramp aggregator	~3%	Tier 2
Google Pay	On-ramp aggregator	~3%	Tier 2
PIX (Brazil)	On-ramp aggregator	~1.5%	Tier 1
SEPA (EU)	On-ramp aggregator	~1%	Tier 2

Important: partner bonuses calculated on post-swap USDC amount (after on-ramp fee). Example: $1,000 via Visa card → on-ramp ~3% fee → $970 USDC in vault. Partner bonus = $970 × rate.

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10. Dynamic Yield Cap & Circuit Breaker

Sustainability Ratio (SR):

SR(t) = Yield_Pool(t) / Yield_Demand(t)

SR	Status	Action
≥ 1.2	✅ Normal	Full yield conditions
1.0–1.2	⚠️ Monitor	Observation, prepare communication
0.8–1.0	🟠 Adjust	λ = SR / 1.0; Adjusted_Yield = Target_Yield × λ
< 0.8	🔴 Protect	AI Agent shifts to Streams 1+2 only; yield capped at 2%/month

SR at 0.85 example (λ = 0.85):

WVI	Standard Yield	Adjusted Yield
40–49	2%	1.70%
60–69	8%	6.80%
80–89	16%	13.60%
90–100	20%	17.00%

User communication by SR level:

SR	Message
≥ 1.2	"Yield fully sustainable ✅"
1.0–1.2	"Yield sustainable, monitoring conditions"
0.8–1.0	"Yield temporarily adjusted by X%/month. Transparency report available."
< 0.8	"Protocol in protection mode. Yield capped at 2%/month. Full details in Transparency Report."

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11. Claim & Withdrawal Flow (v6.0)

Updated to v6.0 per Alexander directives 12.03.2026

11.1 Claim (Yield Withdrawal)

Claim = withdrawal of accrued yield to user's wallet.

Parameter	Value
Available from	Day 1 of yield accrual (MVP)
Free claims per month	2
Fee from 3rd claim	10% of claim amount
Counter reset	Monthly (1st of each month)
Min claim	$1 (or full accrued amount)

11.2 Reinvest Rules

Parameter	Value
Minimum amount	$100
Max frequency	1 time per month
Qualifying action	YES — bonuses accrue on reinvest
On-ramp fee	$0 (already USDC)
Counts toward pools	NO — LP/FSP/IB use new money only

11.3 Grace Period (Yield Transition)

Phase	Duration	Yield Rate
Pre-bracelet	Until bracelet connected	Flat 4%/month for all
Grace period	14 days after bracelet activation	Min 4% (floor protection) or WVI rate if higher
Post-grace	Permanent	Full WVI table. Min 1%/month

11.4 Principal Withdrawal

All withdrawals through WEB platform only.

Deposit Size	Condition	Penalty
$0–$999	Free withdrawal (up to 24h)	0%
$1,000–$9,999	After 30 days	2%
$10,000+	After 90 days	5%

1. User requests withdrawal via WEB
2. WithdrawalQueue checks lock-up status
3. If locked → penalty warning, requires confirmation
4. WellexVault burns shares, releases USDC
5. USDC sent to user wallet (selected chain)
6. Settlement: ≤24h standard, ≤72h high load

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12. Smart Contract Architecture

Contract	Purpose
WellexYieldVault	ERC-4626 — single yield vault for all users
WellexYieldRouter	Deposit/withdrawal routing (multi-EVM), 8-stream allocation
WellexYieldStrategyManager	Manages 800+ strategy execution, AI Agent interface
WellexYieldDistributor	Distributes yield proportionally to WVI (Merkle tree)
WellexYieldOracle	WVI → yield tier + Chainlink price feeds + PoR
WellexYieldGovernance	Protocol parameters, timelock 48h, multisig 3/5
WellexProtectionReserve	On-chain insurance reserve
WellexWithdrawalQueue	Lock-up enforcement, FIFO queue
WellexBridgeAdapter	LayerZero / Across multi-chain integration
WellexOnRampReceiver	Receives USDC from card on-ramp providers

Security: Trail of Bits + OpenZeppelin audit (planned). Proof of Reserves: Chainlink PoR. Bug Bounty: $250K on Immunefi.

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13. Stress Tests by Stream

Stream	Stress Scenario	Impact	AI Agent Response
1 — DeFi Lending	Utilization drops to 40% (bear market)	Yield → 0.3%/month	Reduce to min allocation, shift to Stream 2
2 — RWA	Fed rate cut to 2%	Yield → 0.17%/month	Stable, acceptable floor; no action
3 — Prediction Markets	No major events for 30 days	Volume −70%, yield → 0.5%/month	Auto-reduce allocation; reinstate pre-event
4 — Options	IV crush (VIX < 15)	Premium −60%, yield → 0.5%/month	Shift to shorter-dated options or pause
5 — Funding Rate	Bear market, funding negative	Yield → 0% or negative	Auto-exit to 0%, rotate capital to Streams 1+2
6 — CEX/DEX Arb	Low volatility, spreads < 0.02%	Below gas threshold, yield → 0%	Pause, await higher volatility
7 — DEX LP	Volume −80% + price range exit	Yield → 0.2% + IL risk	Rebalance range, shift to Curve stable pools
8 — Auto-Compound	Gas cost spike (>$50/tx)	Harvest frequency reduced	Extend harvest cycle to weekly
All streams	Simultaneous market shock	SR drops to 0.7	Full protection mode: Streams 1+2 only, yield capped 2%

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14. Key Risks

Risk	Probability	Impact	Mitigation
DeFi yield compression (all streams)	Medium	Medium	8-stream diversification; Dynamic Cap
Stablecoin depeg	Low	High	Multi-stablecoin; auto-exit at 0.5% depeg
Regulatory DeFi ban	Medium	High	Multi-jurisdiction; compliance-first structure
Cross-chain bridge exploit	Medium	Medium	Multi-bridge; per-bridge TVL limits
On-ramp provider failure	Low	Medium	Multi-provider aggregator with auto-failover
Smart contract vulnerability	Low	High	Dual audit + Bug Bounty $250K + Forta monitoring
AI Agent execution error	Very Low	Medium	Human multisig override; circuit breaker
Prediction Market LP loss	Medium	Low	Max 22% allocation; balanced-market filter

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Integration Points

▸ WVI formula → 03_WELLNESS_SCORE.md ▸ APP yield display → 04_APP_UX.md ▸ WEB yield display → 05_DASHBOARD.md ▸ Platform protection → 22_PLATFORM_PROTECTION.md ▸ Tech architecture → 17_TECH_ARCHITECTURE.md ▸ Smart contract spec → 36_YIELD_SMART_CONTRACTS.md

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Open Issues

▸ Trail of Bits + OpenZeppelin audit: scheduled, not yet complete ▸ Live Yield Dashboard (yield.wellex.ai): planned for Month 1 post-launch ▸ AI Yield Agent v1.0: backtesting complete, mainnet deployment Month 2 ▸ Stream 8 (Auto-Compound): Yearn integration tested, Convex pending

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Changelog

▸ v1.0 — Initial yield spec (Feb 2026) ▸ v2.0 — 8 streams consolidated, Dynamic Cap added (Feb 2026) ▸ v3.0 — Stress tests expanded, AUDIT_REPORT_v3 sync (Mar 2026) ▸ v4.0 — Quantum claim removed (→ ML/AI), Realistic Range added, calibration 5%/month confirmed ▸ v4.6 — "No packages, no subscription tiers" canonical statement added ▸ v5.0 — 8 yield streams (expanded from 4), full mathematical proof per stream, AI Yield Agent 800+ strategies, WVI allocation modifier table, blended yield scenarios (bear/normal/bull), stress tests per stream, smart contract names updated to WellexYield* naming

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