Vaults

Vaults are a specific type of collateralized MBA contract which allow users to deposit assets to a contract they create and issue an ownership share against the vault. These vault shares can then be used as collateral for loans, to mint collaterlized tokens, or as a means of payment. Anyone with a spendable vault share UTXO can retrieve assets from the vault.

Vaulting is critical in facilitating other MBAs to work efficiently. For example, the use of vaults allows for different users' deposits to be kept separate without needing to maintain sizable account state on the contract. Vault shares are necessary for MBAs with liquidation conditions, because outstanding minted assets cannot be revoked, so the appropriate user's collateral must be retrievable.

Vaults may contain numerous assets, but relative value differences between them are not innately understood. If vault shares are issued at a fixed rate, then assets are assumed to be of equivalent value. A user burning 10 vault shares could retrieve 10 units of any asset in the vault. For a vault comprised of different stable coins, for example, this is cleaner than retrieving numerous assets proportionately. When vault shares are issued proportionately, burning 1% of vault shares would entitle the retriever to 1% of each asset type in the vault, which is messy. Wouldn't recommend.