On-Chain Yield Mechanics
Raze vaults deliver real yields from real-world asset operations through an automated, transparent on-chain distribution system. This page explains how yields are generated, calculated, and distributed to investors.
Yield Sources
Unlike DeFi protocols that generate yields from token emissions or leverage, Raze vaults earn returns from actual business operations:
Commodity-Backed Vaults
Yield Source: Revenue from commodity sales
Mechanism:
- Mining or agricultural operations extract/produce commodities
- Products sold to processors and manufacturers at market prices
- Sales revenue (minus operating costs) becomes distributable yield
- Quarterly distributions paid to token holders
Yield Driver: Global commodity prices × production volume
Private Credit Vaults
Yield Source: Interest from B2B lending and invoice financing
Mechanism:
- Businesses submit financing requests (invoices, loans, working capital)
- Vault advances funds to borrowers
- Businesses repay with interest
- Net interest income becomes distributable yield
- Quarterly distributions paid to token holders
Yield Driver: Lending volume × interest rates × credit quality
Diversified Portfolio Vaults
Yield Source: Returns from multi-asset strategies
Mechanism:
- Portfolio holds credit instruments, equity stakes, and real estate across sectors
- Assets generate returns from interest payments, dividends, and rents
- Net returns (after fees) become distributable yield
- Quarterly distributions paid to token holders
Yield Driver: Diversified portfolio performance across geographies and asset classes
Trade Finance Vaults
Yield Source: Transaction spreads from import/export financing
Mechanism:
- Importers/exporters require financing for cross-border trade
- Vault provides letters of credit, invoice financing, and working capital
- Transaction spreads (fees minus costs) become distributable yield
- Quarterly distributions paid to token holders
Yield Driver: Trade volume × transaction fees
Yield Calculation
Quarterly Distribution Process
Step 1: Performance Period (ie 90 days)
- Underlying assets generate revenue from operations
- Issuer tracks revenue, expenses, and net profits
Step 2: Yield Determination (End of quarter)
- Issuer calculates distributable yield based on financial performance
Step 3: Allocation Calculation
- Total yield pool divided proportionally among token holders
Step 4: Smart Contract Deposit
- Issuer deposits USDC to yield distribution smart contract
- On-chain transaction creates immutable record
Step 5: Investor Claims
- Investors withdraw proportional yields to their wallets
- Claims processed automatically via smart contract
Yield Distribution Example
Scenario:
- Vault: Commodity-Backed Vault
- Total Token Supply: 1,000,000 COMM tokens
- Quarterly Yield Pool: $100,000 USDC
- Your Token Holdings: 10,000 COMM tokens
Your Yield Calculation:
Your Yield = (10,000 / 1,000,000) × $100,000
Your Yield = 0.01 × $100,000
Your Yield = $1,000 USDC
Annualized Yield (if distributed quarterly):
Annual Yield = $1,000 × 4 = $4,000
Investment Amount (10,000 tokens × $10 price) = $100,000
APY = ($4,000 / $100,000) × 100 = 4% APY
Yield Transparency
Real-Time Tracking
Investors can monitor yields through the portfolio dashboard:
Current Quarter Performance:
- Expected yield (projected based on current performance)
- Days remaining in quarter
- Historical average for comparison
Past Distributions:
- Distribution date
- USDC amount received
- Annualized yield percentage
- Transaction hash (on-chain verification)
Vault Performance:
- Total distributions to date
- Average quarterly yield
- Highest/lowest quarters
- Long-term trend analysis
On-Chain Verification
All yield distributions are verifiable on-chain
Blockchain Explorers:
- XDC Network: https://explorer.xdc.org/
- Redbelly Network: [Custom Explorer]
Investors can verify:
- Total USDC deposited by issuer
- Number of claims processed
- Remaining unclaimed yields
- Historical distribution records
Auto-Replenishment System
Tier-Based Vaults (Most Vaults)
Default Behavior: Auto-rollover OFF
When investments mature, investors have two options:
Option 1: Request Redemption
- Submit redemption request 14 days before maturity
- Receive principal + final yield distribution
- Tokens burned, investment closed
Option 2: Opt-In to Auto-Rollover
- Enable auto-rollover at investment time or anytime before maturity
- Investment automatically reinvests at maturity into same tier
- No action required—funds stay invested
Auto-Rollover Benefits:
- Compound returns (yields reinvest automatically)
- No manual reinvestment needed
- Maintain exposure without gaps
Redemption Process (if auto-rollover disabled):
- 14 Days Before Maturity: Submit redemption request
- Maturity Date: Investment becomes eligible for payout
- Distribution: Issuer transfers principal + yield to wallet
- Token Burn: Redeemed tokens removed from supply
Flexible Redemption Vaults (Trade Finance)
Default Behavior: Flexible redemption with 7-day notice
How It Works:
- No fixed maturity—investment remains active indefinitely
- Yields continue accumulating and distributing quarterly
- Redemption available anytime with 7-day advance notice
Redemption Process:
- Anytime: Submit redemption request
- 7-Day Cooling-Off: Yields continue accruing during notice period
- Payout: Principal + accrued yields transferred to wallet
- Token Burn: Tokens removed from supply
Yield Variability & Risk
Factors Affecting Yields
Yields are not guaranteed and could fluctuate based on:
1. Asset Performance
- Commodity prices (e.g., titanium market prices for Ferrox)
- Credit quality
- Portfolio returns
- Trade volume
2. Operating Costs
- Mining expenses
- Fund management fees
- Servicing costs
3. Reserve Requirements
- Issuers may retain reserves for operational needs
- Liquidity buffers for redemptions
- Capital expenditures
4. Market Conditions
- Macroeconomic factors (interest rates, inflation)
- Industry-specific trends
- Currency fluctuations (non-USD assets)