How the vault works, end to end

The Community Vault page says what $ALLO is. This page is the mechanism behind it, in one pass and in the order money moves: what flows in, what the vault holds, what the daily cycle does with it, what redemption actually does, and how the weekly measurement works. Nothing here requires reading anything first except the overview.

Where the money comes from

The vault has exactly one source of capital: the 3% burn fee every LEV7 purchase pays, in USDG. The treasury collects it and deposits it into the vault, which mints $ALLO shares against it. There are no subscriptions and no sales — $ALLO is not for sale — so nothing else ever mints shares.

From then on, a share's value moves with the vault's net asset value: fee deposits add assets, and the trading account's results move them up or down. Trading results are results — they can be negative, and nothing on this page is a promise of any return.

How the vault gets funded →

What the vault holds

Two things, and their sum is the NAV:

1. USDG cash sitting in the vault contract — the buffer redemptions are paid from.
2. A perpetuals account on Lighter — the strategy account, whose value a reporter writes on-chain at least daily. What that account trades is decided by the weekly vote.

The reported NAV is fenced by contract-enforced limits — freshness, report intervals, a deviation band, a drift budget — listed in Safety features.

The daily cycle

Once a day, a keeper runs the settlement cycle against the vault, and every step writes an audit trail:

1. Sweep — USDG the treasury collected from burn fees is deposited into the vault.
2. Report — the strategy account's value is written on-chain, pricing the vault for this cycle.
3. Settle — queued deposits and queued redemptions settle at this cycle's share price. If the cash on hand cannot cover the redemptions, the vault issues a capital call and the run waits for the strategy account to send assets back before paying anyone. Surplus cash above what redemptions need is deployed to the strategy account.
4. Score and distribute — the day's points epoch is computed from verified balances, published with its result fingerprint, and the day's $ALLO is split pro rata across points and airdropped in batches.

Each daily run closes with a signed-off record — per-stage status, the figures, the failure reasons if any — so "the cron ran" is a checkable claim, not an announcement.

How points become the daily airdrop →

What redemption actually does

Redemption is the part deposits don't get: it is open to anyone holding $ALLO, ungated. But because the underlying account holds live positions, it is asynchronous:

1. You request a redemption. Your shares are queued — nothing is priced yet.
2. On the vault's next daily cycle, the request settles at that settlement's share price, not the price at the moment you asked.
3. You receive USDG. If the vault's cash is short, the capital-call path above pulls assets back from the trading account first.

Two limits shape how fast money can leave, both in the contract: at most one seventh of the vault can exit per day, and that cap is measured against the highest NAV of the last seven days, so a falling NAV cannot shrink the exit. A request left unsettled for two cycles can be cancelled by you or pushed through by anyone on your behalf, and if the NAV ever goes seven days without a report, holders can exit pro rata against cash on hand with no manager involved.

Redeeming, and every safety limit →

The weekly cycle: vote, rebalance, measure

Each week runs on a fixed calendar (weeks open Monday 00:00 UTC):

1. Stakers vote on the next allocation across the vault's markets and its cash position. How the weekly vote works →
2. The rebalance executes the elected allocation in the strategy subaccount.
3. The week is measured, on-chain, against a benchmark that ran at the same time.

How the measurement works

This is the part most often described wrongly, so here is exactly what the contract settles:

• At the week's open, two separate subaccounts are reset to the same starting equity.
• The benchmark subaccount holds the previous week's allocation, untouched for the whole week — it is the "change nothing" position, run passively.
• The strategy subaccount holds the allocation the community just voted in.
• Both run over the same week, through the same market. At the week's close, each side's return is computed from its own opening and closing value.

The strategy clears the bar when its return beats the benchmark's return by at least the larger of 1% of the benchmark's own move and 10 basis points. The margin scales with how much the market itself moved, and never falls below a floor — a rounding-error win doesn't count.

The opening values are recorded on-chain within a day of the week starting, the closing values once the week has elapsed, and the verdict — both returns, the bar, and whether it was cleared — is computed by the contract and published in the transaction. When the strategy clears the bar, everyone who participated that week earns the 7% performance bonus on their points.

See it running

The daily cycle's own output, read live from the site's public API:

To verify any figure independently: the proofs pages publish every epoch's manifest, totals and recipients, and the weekly verdict is an on-chain transaction anyone can read back from the Hurdle contract.

Read the risk disclosures before you rely on any of this.