Krystal Vault Methodology & Notes
The principles, guardrails, and decision logic behind our educational vaults.
The Krystal Vaults are not a product we sell. They are a set of live educational positions that show how we think about liquidity provisioning, risk, and strategy design. This page explains the framework behind those decisions without disclosing the detailed rules and formulas we reserve for deeper training.
1. Educational-First Design
Every vault we showcase in the DeFi Lab is built with one primary question in mind: “What will someone learn from watching this over time?”
- We prioritize clarity of behavior over squeezing out every last basis point of yield.
- We choose band profiles (Moderate, Wide, Straddle) that highlight different trade-offs.
- We document status changes (e.g., Active, In Testing) so you can see how decisions evolve.
In other words, the vaults are designed as case studies, not as “optimized products.”
2. How We Choose Pairs
Pair selection is one of the most important decisions in any liquidity strategy. For the Krystal Vaults we focus on:
- Blue-chip assets: Pairs like WETH/USDC or cbBTC/USDC that have meaningful volume and established narratives.
- Clear behavior: We prefer pairs where price action is educational (trend, chop, mean reversion) rather than chaotic noise.
- Protocol fit: Only pairs that are well supported and liquid on Krystal’s underlying pools on Base.
Over time, this allows you to see how the same band profiles behave across slightly different market contexts without getting lost in obscure tokens.
3. Risk Framing & Guardrails
We treat each vault as capital at risk, even though the primary goal is education. Our internal risk framing includes:
- Size: Vault allocations are kept at a level that is meaningful enough to care about, but small enough that a total loss would not be catastrophic.
- Time horizon: We think in terms of cycles and phases, not hourly trades. This is reflected in how often we adjust ranges.
- Scenario thinking: Before deploying, we ask “What if price ranges?” “What if we trend?” “What if we crash?”
The exact thresholds and sizing rules are part of our deeper methodology and may appear in member materials and courses, not in public pages.
4. From Idea to Vault: Our Internal Flow
While the live vaults may look simple from the outside, there is a consistent internal process behind them:
- Concept: Identify what behavior or trade-off we want to illustrate (e.g., Moderate vs Wide band).
- Draft profile: Translate that concept into an initial band design and fee tier choice.
- Testing phase: Run the vault as “In Testing” while we watch its behavior across a few moves.
- Graduation: When behavior matches the teaching goal, the vault becomes an “Active” reference vault.
- Archiving: Retired vaults may still appear in the Vault Directory for historical study.
What We Share Publicly
The public Krystal Vault pages and DeFi Lab materials are designed so anyone can follow along and learn, even if they never join the community.
- Strategy profiles (Moderate, Wide, Straddle) and their intended behavior.
- High-level reasoning behind pair and band choices.
- Status changes and qualitative observations (“time out of range,” “fees collected,” etc.).
- Conceptual explanations of risk, impermanent loss, and range management.
What We Reserve for Courses & Members
To protect both our work and your learning journey, some details are kept for structured environments like courses or member discussions.
- Specific numerical rules for band width, spacing, and stack ratios.
- Step-by-step configuration walkthroughs for replicating a vault.
- Deeper models of impermanent loss and scenario analysis.
- Ongoing tactical adjustments in response to real-time market conditions.
5. How This Connects to the Vault Directory
The methodology described here is also what informs how vaults appear in the broader Vault Directory. A vault that graduates from “testing” to “active” in the DeFi Lab will typically also:
- Receive a more complete entry in the Vault Directory, with structured metadata and history.
- Be tagged by protocol, pair type, and strategy profile for easier comparison.
- Serve as a reference point for future vaults using similar designs.
This is what allows you to move between the narrative view in the DeFi Lab and the data view in the Directory without losing the thread.
This methodology summary is provided for informational and educational purposes only. It is not a blueprint for your own portfolio, nor is it investment advice. Any DeFi activity you undertake is done independently and directly through the underlying protocols.