> For the complete documentation index, see [llms.txt](https://piggybank.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://piggybank.gitbook.io/docs/vault-infrastructure/vault-lifecycle.md).

# Vault Lifecycle

## Vault Lifecycle

The vault operates on an epoch-based system where deposits and redemptions are processed in batches. This design enables efficient management while maintaining user liquidity.

<figure><img src="/files/dM7wdRZ2jYbRzUd8eTHF" alt=""><figcaption></figcaption></figure>

### Epoch Progression

Each epoch represents a management period. When an admin calls `roll_epoch`:

1. Performance from epoch n-2 is declared
2. Deposits from epoch n-1 are withdrawn
3. Redemptions from epoch n-2 become claimable
4. Epoch counter increments

### Deposit Flow

Users can deposit at any time during an epoch:

1. User transfers underlying tokens to vault
2. Vault mints liquid tokens based on current exchange rate
3. Deposits accumulate until epoch roll
4. Admin withdraws deposits for strategy execution

The exchange rate calculation:

```
minted_lst = deposited_underlying * lst_supply / underlying_represented_by_lst
```

### Redemption Flow

Redemption occurs in three phases:

#### Phase 1: Redemption Request

* User burns liquid tokens
* System creates redemption record
* Redemption queues for processing

#### Phase 2: Processing (Epoch + 1)

* Admin processes redemptions during epoch roll
* Underlying allocated for claims

#### Phase 3: Claim (Epoch + 2)

* User claims underlying tokens
* Redemption record marked complete

### Performance Reporting

Performance impacts all liquid token holders proportionally. When positive performance is reported:

* Managed assets increase
* LST/underlying exchange rate improves

When negative performance is reported:

* Managed assets decrease
* LST/underlying exchange rate decreases

The constant exchange rate during an epoch ensures fair treatment of all deposits and redemptions within that period.


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