ItoVault is a decentralized finance (defi) system for creating tokens whose price tracks an underlying index, with the token efficiently capturing the index’s dividends (and in V2:), interest, short rebate fee, and other benefits with minimal frictional loss.
ItoVault uses a collateral system to ensure that the tokens issued are soft pegged to the chosen index. As an example for the index represented by the SPY ETF, users can deposit ETH into vaults, which provides collateral to let these vaults issue vSPY tokens that track the SPY.
A price oracle ensures that the vaults always have enough funds to back the value of the tokens. When price of the underlying index increases, the oracle reports this increase, and vaults must either buy back tokens or deposit more ETH, either of which ensure the tokens have higher value. The reverse occurs to push token prices down if the index price falls.
The current version, MVP (V1), doesn’t use ItoVault governance tokens. All system fees are payable in ETH.
However, the governance token does exist already, and if you’re interested and qualified, please use the contact form to enquire.
In the future, security audits, full decentralization, and thorough testing of both the code and the economics with time will provide a very high degree of assurance of the reliability of the system. The ultimate goal of the system is to ensure users can trust that an Asset Token would be a great representation of efficiently putting money into the underlying index
Currently, in the MVP version (V1), there has been a thorough manual review, but there is no >95% guarantee on the security of the code and the system. The system is still experimental, although in good cases of the world should perform very well.
Currently, the ItoVault system supports Ether as the deposit collateral. This is a natural choice for a defi project on the Ethereum blockchain
The current Asset Token supported is the SPY ETF, and in the future more assets can be added by governance.