OAV v3 (Production)

Single-strategy Optimized Allocator Vaults with automatic compounding and configurable fees

Overview

OAV v3 is the current production standard for Optimized Allocator Vaults. Each v3 vault wraps a single DeFi strategy with automatic compounding, configurable fee logic, and ERC-4626 compliance — enabling partners to monetize yield with zero custom fee infrastructure.

The key advancement is automatic offramping and reinvestment of incentive tokens: vaults claim, swap, and reinvest rewards automatically, compounding returns without manual intervention.

OAV v3 is the recommended architecture for all new single-strategy deployments. For multi-strategy allocation, see OAV v4 (Meta Vaults).

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Key Features

Feature	v3 Capability
Strategy model	Single strategy per vault
Fee types	Deposit, performance, and management fees
Compounding	Automatic via offramping pipeline
Incentive handling	Claim → Swap → Reinvest (on-chain)
ERC-4626	Compliant

Auto-compounding

Incentive tokens automatically converted to deposit asset and reinvested

Full fee support

Deposit, performance, and management fees — all on-chain

Clean yield

Users receive pure yield in their deposit token — no manual claiming or swapping

Non-custodial execution

All offramping logic runs on-chain with no custody requirement

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Automatic Offramping

The offrampIncentives() function automates the multi-step reward reinvestment process:

1. Harvest

   Vault claims all incentive tokens from the underlying strategy

2. Swap

   Incentives are swapped to the vault’s underlying token via whitelisted routes

3. Validate

   Slippage is validated against maxSlippageBps configuration

4. Reinvest

   Proceeds are deposited back into the strategy, increasing vault asset balance

The offramping function can be triggered automatically during user interactions (deposit, redeem), enabling seamless compounding without external infrastructure.

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IncentiveOfframpRoute Configuration

Each allowed swap path is registered as an IncentiveOfframpRoute:

struct IncentiveOfframpRoute {
  address inputToken;
  address outputToken;
  address router;
  bytes functionCallData;
  uint256 maxSlippageBps;
  bool active;
}

• Routes are whitelisted by vault admin and referenced by route ID
• Swaps execute deterministically with on-chain slippage enforcement
• No off-chain signing or custodial control required

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Offramping Options

Automatic (Recommended)

Fully on-chain, non-custodial

The offrampIncentives() function executes entirely within the vault contract:

• Triggered during user actions or by harvester role
• Uses predefined IncentiveOfframpRoute configurations
• All tokens remain under vault control from harvest through reinvestment

Manual (Multi-sig)

For custom control or compliance requirements

1. Claim rewards

   ADMIN_ROLE executes claimAdditionalRewards() — tokens transfer to designated wallet

2. Swap via DEX

   Incentive tokens swapped to underlying (e.g., MORPHO → USDC via Aerodrome)

3. Deposit into strategy

   Underlying deposited into strategy, receiving yield-bearing receipt token

4. Transfer to vault

   Receipt tokens transferred to vault, increasing total assets without minting new shares

Each step requires multi-sig approval (e.g., Safe with Fireblocks signer).

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Fee Model

Fees are configured per vault and enforced on-chain:

Fee Type	Mechanism	Timing
Deposit fee	Deducted at entry as shares minted to fee recipient	On deposit
Performance fee	Calculated on realized profits since last harvest	At harvest
Management fee	Accrued continuously based on AUM and elapsed time	At harvest

All fees are applied by minting new vault shares to the configured feeRecipient, ensuring fees are collected via proportional dilution without pulling underlying assets out of the vault.

The computedRewardRate field in API responses reflects net APY after performance fees, providing transparent yield expectations.

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Security

• Transactions only use whitelisted IncentiveOfframpRoute definitions
• Offramping logic is access-controlled and can be paused per vault
• On-chain execution with no external custody reduces operational risk
• All routes subject to maxSlippageBps validation
• Funds are strictly limited to the whitelisted strategy

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Integration

OAV v3 vaults are integrated via the standard Yield.xyz API:

# Discover OAV v3 yields
GET https://api.yield.xyz/v1/yields?type=vault

# Enter position
POST https://api.yield.xyz/v1/actions/enter
{
  "yieldId": "ethereum-usdc-morpho-oav",
  "address": "0x...",
  "arguments": { "amount": "1000000000" }
}

Or integrate directly with the deployed ERC-4626 contracts using deposit(), withdraw(), and redeem().

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Next Steps

OAV Overview

Introduction, off-the-shelf OAVs, and API endpoints

OAV v4 (Meta Vaults)

Multi-strategy allocation and dynamic rebalancing

Fees

Fee configuration details

DeFiKit

Full DeFi integration guide