Vortex Protocol Spec.

Vortex is a yield-native liquidity protocol built on Uniswap v4. VRTX is distributed through a protocol-owned VRTX/USDC liquidity system composed of 100 programmed bands.

As price moves upward, crossed bands convert into USDC reserves controlled by the hook. The nearest crossed band remains warm for immediate restoration on retrace. Older reserves are deployed into Aave, where idle USDC becomes productive capital.

Aave yield is used to buy back and burn VRTX. In parallel, treasury fees are routed into an Ethena-based yield engine whose holdings remain permanently protocol-owned and exist to generate additional burn flow.

Vortex connects liquidity, reserves, yield, and supply reduction into one loop: trading forms protocol capital, protocol capital earns yield, and yield reduces supply.

Automated market makers made market creation permissionless, but liquidity is only fully productive when it is active. Once price moves away from a range, that capital can stop serving the current market.

Vortex treats inactive liquidity as an asset.

When demand moves through a VRTX band, the band has completed its distribution role. Its VRTX has been sold into USDC, and that USDC becomes protocol-controlled reserve capital. The reserve can remain warm for fast recall, move into productive deployment, or return to active liquidity if price retraces.

This reframes protocol-owned liquidity as an active balance sheet: a trading surface, reserve engine, yield base, and source of supply reduction.

VRTX launches through 100 protocol-owned liquidity bands. Buyers move price upward through those bands, converting VRTX liquidity into USDC reserves. The hook keeps the closest crossed band warm, while older eligible bands move into productive deployment.

Crossed bands increase USDC reserves. Productive reserves generate yield. Realized yield reduces VRTX supply.

VRTX has a fixed genesis supply. Principal reserve capital remains part of the liquidity system; only yield becomes burn fuel.

VRTX demand
-> band crossing
-> USDC reserve formation
-> productive deployment
-> yield generation
-> VRTX buyback and burn
-> liquidity restoration when needed

Inactive liquidity becomes productive capital. Productive capital becomes permanent supply reduction.

Vortex is built around a VRTX/USDC Uniswap v4 pool controlled by a custom hook. The hook manages the launch curve, band transitions, reserve accounting, productive deployment, and burn execution.

The VRTX supply is fixed at 1,000,000 tokens and distributed across 100 protocol-owned liquidity bands. Each band represents a defined USDC interval in the launch curve. As the market buys through these bands, VRTX is released into demand and USDC accumulates as protocol-controlled reserve capital.

Vortex has two independent yield engines:

The core economic loop is based on fixed supply, protocol-owned liquidity, productive reserves, and yield-funded burns.

Vortex uses a Variable Liquidity Distribution Framework, or VLDF, to distribute VRTX across 100 cumulative-USDC liquidity bands.

Each band defines:

1. a cumulative USDC interval
2. a VRTX allocation
3. a liquidity range in the VRTX/USDC pool

Early bands are narrow and VRTX-dense. Later bands widen and contain progressively less VRTX. This creates early liquidity concentration, deeper USDC intervals, and a long scarcity tail.

4.1 Curve Constants

TOTAL_SUPPLY        = 1,000,000 VRTX
NUM_BANDS           = 100
MAX_CUMULATIVE_USDC = 14,365,000 USDC
VIRTUAL_USDC        = 20,000 USDC
ALPHA               = 0.75

MAX_CUMULATIVE_USDC defines the full USDC depth of the curve. VIRTUAL_USDC softens the early distribution by preventing the first bands from receiving an excessive share of supply. ALPHA controls the rate at which allocation decays as cumulative depth increases.

4.2 Allocation Formula

f(x) = 1 / (VIRTUAL_USDC + x)^0.75

VRTX(band) = TOTAL_SUPPLY
           x (f(usdcLo) - f(usdcHi))
           / (f(0) - f(MAX_CUMULATIVE_USDC))

The final band receives the integer-rounding remainder, ensuring total allocated supply equals exactly 1,000,000 VRTX.

Every band's allocation is known before launch, every crossed band has a defined reserve interval, and every phase belongs to the same deterministic distribution.

4.3 Discovery Bands

Bands #0-10
15,000 USDC width each
817,349.276033 VRTX / 81.7349%

Discovery Bands concentrate early supply into narrow zones. They define the initial price path and allow the market to establish early VRTX/USDC demand with high liquidity density.

While the current band is below Band #5, Vortex applies a temporary 10,000 VRTX (1%) max transaction size to buys and sells. This is band-based and expires automatically at Band #5; it has no owner-controlled toggle, max-wallet rule, or discretionary whitelist.

4.4 Expansion Bands

Bands #11-40
50,000 USDC width each
153,682.033414 VRTX / 15.3682%

Expansion Bands widen the curve after the initial discovery phase. Each zone requires more USDC to cross, reducing transition frequency while continuing to convert demand into reserves.

4.5 Acceleration Bands

Bands #41-99
150,000-300,000 USDC width each
28,968.690553 VRTX / 2.8969%

#41-50: 150,000 USDC each
#51-60: 175,000 USDC each
#61-70: 200,000 USDC each
#71-80: 225,000 USDC each
#81-90: 250,000 USDC each
#91-99: 300,000 USDC each

Acceleration Bands contain the lowest VRTX density and the largest USDC intervals. As remaining supply becomes scarcer, each new zone requires deeper demand and produces larger reserves when crossed.

4.6 Curve Checkpoints

Launch:      $0.026467 / FDV $26,467.18
End Band 0:  $0.070494 / FDV $70,493.89
End Band 10: $1.298442 / FDV $1,298,441.99
End Band 40: $62.053086 / FDV $62,053,085.62
End Band 99: $2,645.411710 / FDV $2,645,411,710.46

These are structural curve checkpoints, not price predictions.

Each Vortex band moves through a defined lifecycle as price moves across the curve.

ACTIVE
-> WARM RESERVE
-> PARTIAL PRODUCTIVE
-> FULL PRODUCTIVE
-> RECALL
-> ACTIVE

The lifecycle keeps near-spot reserves immediately available while moving older idle capital into productive use.

The nearest crossed band always remains warm.

Structural warm reserve: 1 crossed band
Partial delay: 20 blocks
Full delay: 100 blocks
Partial productive share: 50%
Full productive share: 100%

Band deployment is lazy and transaction-triggered. Blocks make a band eligible, but state changes only when a swap or maintenance path executes.

First eligible pass:
WARM RESERVE -> PARTIAL_PRODUCTIVE

Later eligible pass:
PARTIAL_PRODUCTIVE -> FULL_PRODUCTIVE

The Aave Idle-Band Engine turns crossed VRTX liquidity into productive USDC reserves.

When price moves above a band, that band becomes sub-spot liquidity. Its VRTX has been sold into USDC, and the reserve is no longer needed near the active price zone. Vortex removes that liquidity from the pool, keeps the nearest crossed band warm, and deploys older eligible reserves into Aave.

The reserve remains tied to its original band, preserving the link between liquidity, capital, and restoration.

Vortex separates reserve principal from earned yield.

Principal = liquidity capital
Yield     = burn capital

Principal remains part of the liquidity system. It backs future restoration if price retraces into a crossed band. Yield is the surplus generated by productive deployment. Once Aave yield exceeds the burn threshold, it becomes available for VRTX buyback and burn.

Aave yield exceeds threshold
-> yield is realized from Aave
-> keeper reward is paid from the actioned amount
-> remaining USDC buys VRTX
-> VRTX is sent to the burn address

Warm reserves are restored from hook-held USDC. Productive reserves are withdrawn from Aave and restored into the pool.

The Aave Idle-Band Engine is the first burn engine of Vortex: inactive liquidity becomes productive capital, and productive yield becomes permanent supply reduction.

The Treasury Ethena Engine is the second burn engine of Vortex.

While the Aave engine is funded by crossed-band reserves, the Treasury engine is funded by swap fees. A portion of every swap fee accumulates as treasury flow, then moves into TreasuryContract where it is converted into Ethena sUSDe.

Treasury holdings are permanently protocol-owned and hook-directed. They exist to generate yield and feed VRTX buyback and burn.

1% swap fee
-> 0.5% operations flow
-> 0.5% treasury flow

Treasury flow accumulates in the hook until the flush threshold is reached. Once flushed, the keeper reward is paid and the remaining USDC moves into TreasuryContract as permanent protocol-owned capital.

TreasuryContract converts USDC into USDe, then deposits USDe into sUSDe.

USDC
-> USDe
-> sUSDe

As yield accrues, the value of sUSDe in USDe terms increases. The principal remains part of TreasuryContract holdings. The yield becomes burn capital once it exceeds the configured threshold.

sUSDe yield exceeds threshold
-> cooldown is initiated
-> cooldown expires
-> USDe is unstaked
-> keeper reward is paid from the actioned amount
-> remaining value is routed into VRTX
-> VRTX is burned

The Treasury Ethena Engine gives Vortex a second yield source: fee-derived, permanently protocol-owned capital that exists to feed the burn loop.

Vortex is designed as a complete liquidity loop.

1. Users buy VRTX with USDC.
2. Price moves through protocol-owned bands.
3. Crossed bands become USDC reserves.
4. The nearest crossed reserve remains warm.
5. Older reserves are deployed into Aave.
6. Aave yield buys back and burns VRTX.
7. Treasury fees generate sUSDe yield.
8. Ethena yield buys back and burns VRTX.
9. Retraces recall reserves and restore liquidity.

The full Vortex cycle turns market activity into reserve formation, productive capital, and supply reduction.

VRTX has a fixed genesis supply of 1,000,000 tokens. The supply enters the market through protocol-owned liquidity bands and decreases through yield-funded burns.

VRTX starts fixed.
Yield buys VRTX.
Bought VRTX is burned.
Supply moves downward.

Buyers acquire VRTX by moving through the VRTX/USDC curve. Each buy consumes liquidity from active bands and leaves USDC behind as reserve capital.

Demand enters with USDC.
VRTX exits protocol-owned liquidity.
USDC becomes reserve capital.

Vortex has two independent sources of yield-funded supply reduction.

Aave yield
Generated by crossed-band USDC reserves.

Ethena yield
Generated by permanent treasury holdings.

Vortex separates reserve capital from earned yield.

Principal remains liquidity capital.
Yield becomes burn capital.

Principal backs the liquidity system. It can be warm, productive, or recalled for restoration. Yield is the surplus used to reduce VRTX supply.

Vortex is designed as a rule-based liquidity system.

The core parameters that define the protocol are fixed: supply, band count, curve constants, fee split, reserve lifecycle delays, deployment shares, keeper rewards, gas guard, and burn thresholds.

10.1 Fixed Monetary Design

Fixed supply.
Programmed distribution.
Yield-funded supply reduction.

The supply path is shaped by the VLDF curve and the burn engines.

10.2 Rule-Based Burn Execution

Vortex burn paths are permissionless and threshold-based.

yield threshold reached
-> keeper action
-> buyback
-> burn

The keeper's role is execution: eligibility, rewards, and value routing are defined by the protocol.

10.3 Permanent Treasury Purpose

Capital routed into the Treasury engine has a defined purpose: generate Ethena yield and route realized yield into VRTX burns.

treasury flow
-> permanent protocol capital
-> sUSDe yield
-> VRTX burn flow

10.4 Immutable Liquidity Architecture

The VLDF curve defines the full VRTX distribution path before launch.

100 bands.
14,365,000 USDC cumulative depth.
1,000,000 VRTX allocated across the curve.

Each band has a known interval, allocation, and lifecycle behavior.

11.1 Token Parameters

11.2 VLDF Parameters

11.3 Band Widths

11.4 Band Lifecycle Parameters

11.5 Fee Parameters

11.6 Aave Engine Parameters

11.7 Treasury Engine Parameters

11.8 Keeper and Execution Parameters

Vortex is built around a simple principle: liquidity should remain useful even after it leaves the active price range.

The protocol turns programmed liquidity into an engine for reserve formation, productive capital, and supply reduction. Its curve defines the distribution path. Its hook manages the movement of capital across states. Its yield engines convert idle value into permanent VRTX burns.

This creates a market structure where liquidity is not static. It moves with the protocol: active when needed, productive when idle, and recallable when price returns.

Vortex is the combination of these parts into one system: programmed distribution, productive reserves, and yield-native supply reduction.