> ## Documentation Index
> Fetch the complete documentation index at: https://docs.vest.edenfinance.org/llms.txt
> Use this file to discover all available pages before exploring further.
# How it works
# How EdenVest Works
EdenVest revolutionizes DeFi investing by providing **fixed-term investment pools** with guaranteed returns. Unlike traditional yield farming, EdenVest offers predictable outcomes through a sophisticated smart contract ecosystem.
## Investment Lifecycle
```mermaid theme={null}
sequenceDiagram
participant U as User
participant EC as EdenCore
participant IP as InvestmentPool
participant NFT as NFTManager
participant TC as TaxCollector
U->>EC: 1. invest(pool, amount, title)
EC->>IP: 2. Validate & process investment
IP->>IP: 3. Calculate LP tokens & returns
IP->>NFT: 4. Mint position NFT
IP->>TC: 5. Collect protocol tax
IP->>U: 6. Return tokenId & LP tokens
Note over U,TC: Investment period (7 days - 2 years)
U->>EC: 7. withdraw(pool, tokenId, lpAmount)
EC->>IP: 8. Validate maturity & ownership
IP->>NFT: 9. Burn position NFT
IP->>U: 10. Transfer principal + returns
```
## Core Components
### 1. Investment Pools
Each investment pool is an isolated smart contract with specific parameters:
* **Lock Duration**: 7 days to 2 years
* **APY Rate**: Fixed percentage returns
* **Min/Max Investment**: Deposit limits
* **Utilization Cap**: Total pool capacity
* **Multisig Control**: Multi-signature governance
* **Admin Functions**: Pool configuration updates
* **Emergency Controls**: Pause/unpause capabilities
* **Tax Collection**: Protocol fee handling
### 2. LP Token Economics
When you invest, you receive **LP (Liquidity Provider) tokens** representing your share:
```typescript theme={null}
// First investment in empty pool
lpTokens = investmentAmount // 1:1 ratio
// Subsequent investments
lpTokens = (investmentAmount × totalSupply) ÷ totalDeposited
```
**Example:**
* You invest **1,000 cNGN** in an empty pool → Get **1,000 LP tokens**
* Pool now has 1,000 cNGN total, 1,000 LP tokens total
* Next investor deposits **500 cNGN** → Gets **500 LP tokens**
* Pool now has 1,500 cNGN total, 1,500 LP tokens total
### 3. NFT Position Tracking
Every investment is represented by a unique **non-transferable NFT** that displays:
* Investment amount and expected returns
* Time remaining until maturity
* Pool name and APY rate
* Dynamic progress bars
* Status indicators (Active/Mature/Withdrawn)
* Token ID and investment ID mapping
* Deposit and maturity timestamps
* LP token amounts
* Pool contract address
* Floating animations with CSS transforms
* Color-changing progress bars
* Pulsing effects for active investments
* Nigerian-inspired design elements
## Return Calculation
EdenVest uses a **simple interest formula** for predictable returns:
```solidity theme={null}
expectedReturn = (principal × APY × lockDuration) ÷ (10000 × 365 days)
```
### Examples
```typescript 30-Day Investment theme={null}
const principal = 1000; // 1000 cNGN
const apy = 1200; // 12% APY (1200 basis points)
const lockDuration = 30 * 24 * 60 * 60; // 30 days in seconds
const expectedReturn = (principal * apy * lockDuration) / (10000 * 365 * 24 * 60 * 60);
// expectedReturn = 9.86 cNGN
// Total at maturity = 1009.86 cNGN
```
```typescript 1-Year Investment theme={null}
const principal = 5000; // 5000 cNGN
const apy = 1500; // 15% APY (1500 basis points)
const lockDuration = 365 * 24 * 60 * 60; // 1 year in seconds
const expectedReturn = (principal * apy * lockDuration) / (10000 * 365 * 24 * 60 * 60);
// expectedReturn = 750 cNGN
// Total at maturity = 5750 cNGN
```
## Token Swap Integration
EdenVest integrates **Assetchain Swap** for seamless token swapping:
### Swap Process
1. **Quote Generation**: Get expected cNGN output amount
2. **Slippage Protection**: Automatic slippage calculation (max 3%)
3. **Token Transfer**: Move input tokens to SwapRouter
4. **Swap Execution**: Execute trade via Assetchain Swap
5. **Investment Processing**: Use output cNGN for investment
### Supported Features
* Rate limiting for quote requests
* Maximum slippage protection
* Failed swap tracking and limits
* Emergency pause capabilities
* Custom fees per token pair
* Default 0.3% fee tier
* Support for 0.05%, 0.3%, and 1% tiers
* Admin-configurable fee structures
## Tax Collection System
The protocol collects a **configurable tax** (default 2.5%) on all investments:
### Tax Mechanism
```mermaid theme={null}
graph LR
A[Investment] --> B{Calculate Tax}
B --> C[User LP Tokens]
B --> D[Tax LP Tokens]
D --> E[TaxCollector Contract]
E --> F[Protocol Treasury]
```
### Tax Configuration
* **Global Tax Rate**: Protocol-wide default (2.5%)
* **Pool-Specific Tax**: Pools can override global rate
* **LP Token Tax**: Tax collected as LP tokens, not cNGN
* **Treasury Distribution**: Periodic withdrawal to protocol treasury
## Governance & Security
### Multisig Governance
Critical operations require **multiple signatures** (minimum 2 of N):
* Pause/unpause protocol
* Update global tax rates
* Change protocol treasury
* Emergency fund recovery
* Add/remove multisig signers
* Update pool configurations
* Manage pool multisig wallets
* Control deposit acceptance
* Emergency pool actions
### Proposal System
```typescript theme={null}
interface Proposal {
id: number;
proposalType: ProposalType;
proposer: address;
createdAt: timestamp;
expiresAt: timestamp; // 2-day expiry
executed: boolean;
signatureCount: number;
data: bytes; // Encoded function call
description: string;
}
```
**Proposal Lifecycle:**
1. **Creation**: Multisig signer creates proposal
2. **Signing**: Other signers review and sign
3. **Auto-execution**: Executes when threshold reached (2+ signatures)
4. **Expiry**: Proposals expire after 2 days