Capital Flow & Lifecycle

Overview of how user deposits are stored and utilized in Nexxore: vault mechanics, agent coordination, execution routing, and the complete deposit-to-yield lifecycle.

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Overview

Understanding how capital moves through Nexxore is essential for users and developers. This document details the complete lifecycle from deposit to returns.

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General Flow of User Deposits

1. Users deposit collateral assets into Nexxore Vaults—these can be stablecoins (USDC, USDT) or non-stablecoin assets (ETH, BTC).

2. Vault shares are minted in return, following the ERC-4626 standard. The amount received is calculated based on the prevailing NAV per share.

3. Deposited collateral is routed to the Agent Layer, where the Portfolio Agent coordinates with Research and Alpha Agents to assess market conditions.

4. The Execution Agent deploys capital to external venues (GMX, Uniswap, etc.) based on the strategy mandate.

5. The Risk Agent monitors positions continuously, enforcing drawdown limits and CVaR constraints.

6. Agents automatically rebalance positions to maintain strategy parameters (e.g., delta neutrality) or exit when profit targets are achieved.

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Key Parties

Party	Role
User	Deposits collateral, receives vault shares, withdraws at will
Vault Contract	ERC-4626 compliant, handles deposits/withdrawals, accounting
Agent Layer	Autonomous decision-making: research, signals, execution, risk
Execution Venues	External protocols (GMX, Uniswap) where trades settle

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Step 1: Deposit

Users deposit collateral into Nexxore Vaults through the Web3 interface.

Supported Collateral

Asset	Status
ETH	Supported
USDC	Supported
USDT	Supported
DAI	Coming Soon

Transaction Flow

1. User approves token spending (ERC-20 approve)

2. User calls vault.deposit(assets, receiver)

3. Vault mints shares to user

4. Event emitted: Deposit(user, amount, shares)

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Step 2: Minting & Accounting

Once deposited, the protocol converts collateral to internal accounting units.

nUSD Accounting

Field	Value
Deposit	10 ETH @ $3,200 = $32,000
nUSD Credited	32,000 nUSD
Vault Shares	32,000 shares (1:1 at inception)
NAV per Share	$1.00

As Strategies Generate Returns

After 30 days (example):

• Your Shares: 32,000 (unchanged)

• NAV per Share: $1.01

• Your Value: 32,320 nUSD (+1%)

ERC-4626 Standard

Benefit	Description
Standard Interface	Compatible with all ERC-4626 integrations
Composable	Can be used as collateral in other protocols
Easy Accounting	Built-in conversion functions
Transferable	Vault shares can be transferred or traded

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Step 3: Mandate Assignment

The Portfolio Agent receives capital and consults other agents to determine deployment strategy.

Agent Coordination

Agent	Input	Output
Research Agent	Market data, on-chain metrics	Market state assessment
Alpha Agent	Technical + on-chain analysis	Trading signals
Portfolio Agent	All agent inputs	Strategy mandate

Decision Matrix

Market Condition	Alpha Signal	Strategy Deployed
High Funding, Bullish	Neutral	Delta-Neutral (capture funding)
Low Funding, Bullish	Long	Leveraged Long
High Funding, Bearish	Short	Hedge + Short
Choppy/Uncertain	Neutral	Stay DN, reduce size

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Step 4: Execution

The Execution Agent deploys capital across venues with optimal routing.

Route Optimization

For a $32,000 Delta-Neutral ETH position:

Step 1: Buy Spot ETH

Venue	Price	Fee	Selected
Uniswap V3	$3,198	0.3%
1inch	$3,199	0.2%	✓
Curve	$3,197	0.5%

Step 2: Open Short Perp

Venue	Slippage	Funding	Selected
GMX	Low	+0.01%	✓
dYdX	Medium	-0.005%

Position Summary

Position	Value
Long: 10 ETH spot	$31,990
Short: 10 ETH perp	$32,000 notional
Net Delta	~0 (market neutral)
Funding Rate	+0.01%/8hr (earning)

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Step 5: Monitoring

The Risk Agent monitors positions continuously.

Health Checks (Every Block)

Metric	Current	Limit	Status
Spot Position Value	$32,150	—	Normal
Perp Unrealized PnL	-$150	—	Offset by spot
Margin Ratio	15%	>10%	Healthy
Funding Accumulated	+$12.80	—	Earning
Net Portfolio Delta	0.02 ETH	<0.5 ETH	OK

Alert Thresholds

Metric	Warning	Critical	Action
Drawdown	> 2%	> 3%	Reduce exposure
Delta Drift	> 0.5 ETH	> 1.0 ETH	Rebalance
Margin Ratio	< 20%	< 15%	Add collateral
Funding Rate	< -0.03%	< -0.05%	Close position

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Step 6: Rebalancing

Agents automatically rebalance to maintain strategy parameters.

Rebalancing Triggers

Trigger	Condition	Action
Delta Drift	|Net Delta| > Threshold	Adjust perp or spot size
Funding Flip	Funding < -0.03%	Close position, wait for better conditions
Profit Target	Accumulated Profit > Target	Take partial profit, rebalance
Risk Limit	Drawdown > Max	Force close, move to stable

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Withdrawal Process

When users want to exit, the process reverses.

Withdrawal Steps

1. User requests withdrawal (specify amount or "max")

2. Protocol calculates share value: Shares × NAV per share

3. Execution Agent unwinds proportional positions

4. Assets returned to user (original collateral + profits - fees)

Example Withdrawal

Field	Value
Deposited	10 ETH (valued at $32,000)
After 90 days	—
Funding earned	$960
Fees paid	$32
Net profit	$928 (2.9%)
Withdrawal	10 ETH + 0.29 ETH (profit)

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Summary

Step	Description	Responsible	Time
1. Deposit	User sends collateral	User	~30 sec
2. Minting	Shares issued, nUSD accounted	Vault Contract	~30 sec
3. Mandate	Strategy assignment	Portfolio + Research	~1 min
4. Execution	Capital deployed to venues	Execution Agent	~2 min
5. Monitoring	Continuous risk tracking	Risk Agent	Ongoing
6. Rebalancing	Maintain strategy parameters	All Agents	As needed

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Next Steps

• Risk Framework →

• Perpetual Vaults →

• Getting Started →