Flow of Funds
This diagram outlines the full lifecycle—from user deposit to yield generation and redemption—showing every stakeholder involved.
How Nara's Tokenized Vault System Works
User Deposit Through Distribution Partners
Users deposit funds through Distribution Partners operating on a B2B2C model. These partners facilitate the initial user onboarding and fund collection process, creating a seamless entry point into the Nara ecosystem.
Vault Token Issuance
The Nara Vault receives user deposits and issues vault tokens in return. These ERC-4642 tokens represent the user's proportional ownership in the vault and serve as proof of their investment position.
Asset Acquisition
The Nara Vault uses the deposited funds to purchase underlying assets. These assets are carefully selected to generate consistent yield while maintaining appropriate risk profiles.
Custodial Security
All purchased assets are held securely by an independent Custodian, ensuring institutional-grade security and regulatory compliance. The custodian maintains complete separation between user assets and operational funds.
Investment Management & Yield Generation
The Investment Broker allocates funds into yield-generating strategies, specifically:
• Institutional-grade yield products (e.g., money market funds, high-yield credit)
• Professional portfolio management optimized for consistent returns
• Risk-managed investment strategies across diversified asset classes
Yield Distribution to Vault
The Investment Strategist distributes generated yield back to the Nara Vault, increasing the value of the tokens purchased by the vault. This creates automatic appreciation for all vault token holders.
Token Value Appreciation
As yield is distributed back to the vault, the underlying value of vault tokens appreciates proportionally. This appreciation occurs as a result of asset performance and yield accumulation.
Flexible Redemption Process
Users can redeem their vault tokens anytime through the system. Upon redemption:
• Vault tokens are redeemed at their appreciated value
• The vault issues stablecoins back to users
• Users receive their original principal plus all accumulated yield capture
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