Core Mechanics

Learn the core concepts behind Nest

Vault Tokens

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Vault tokens represent stake in a Nest Vault's earning mechanics.

Minting

When users deposit stablecoins into a vault, such as Plume USD, they receive vault tokens in return. As the vault's underlying assets accrue in value, so do the vault tokens.

Redeeming

When users redeem their vault tokens, the user receives a proportional amount of stablecoins in return, subject to the vault token value at the time of redemption and the vault's withdrawal conditions.

Additional technical details:

• Withdrawal Times: Burning vault tokens and subsequently withdrawals may take time to process. This mechanism is designed to reduce L1 gas costs. Users that request withdrawals will get an estimated time on the Nest app. Withdrawal times will decrease when vaults are migrated from Ethereum to Plume.

Underlying Assets

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Underlying Assets are represented in tokens, and these tokens are issued to the vault by issuers in exchange for stablecoins facilitated by the vault and user deposits.

At Nest, we make a distinction between two types of underlying assets:

Yield-Bearing Assets

Tokenized assets that generate yield.

There is a wide variety of high-quality assets and financial instruments across Nest vaults, including but not limited to:

• Treasury bills

• Tokenized invoice financing

• Working capital loans

• Institutional-grade ETFs

• Real-world asset tokenized royalties

• And more...

Yield accrues subject to the underlying asset's financial structure, resulting in the appreciation of the tokens that are held within the vaults.

Liquidity Assets

High quality, highly liquid stablecoins, leveraged by vault managers as buffer to process redemptions.