# Vault Lifecycle

Deposit, Minting, Redemption, and Withdrawals

NODO Vaults are built for seamless user interaction and autonomous backend execution. The lifecycle covers deposit, NDLP minting, vault growth, and flexible withdrawals — all fully on-chain.

#### 1. Deposit & Minting NDLP

When users deposit assets (e.g., USDC) into a vault:

* NDLP tokens are minted 1:1 based on the vault’s current Net Asset Value (NAV).
* Example: If 1 NDLP = 1.05 USDC and a user deposits 210 USDC → they receive 200 NDLP.
* NDLP reflects a user’s proportional share of the vault.
* Minted tokens are transferable.

#### 2. Vault Growth & Yield Accrual

Vaults generate yield via trading fees and arbitrage captured by the AI agent:

* NDLP token balances stay fixed — value accrues via an increasing conversion rate.
* This creates auto-compounding yield with no manual claiming or reinvestment.

#### 3. Withdrawal & Redemption

Users can redeem NDLP for USDC at any time:

* The system calculates the latest conversion rate, burns NDLP, and returns the corresponding amount of USDC.
* There are no withdrawal fees and no restrictions on exits.
* Performance fees apply only on realised gains above the High Water Mark (HWM).

#### 4. Emergency Shutdown (If Triggered)

Vaults may enter emergency mode to safeguard funds:

* Deposits are paused.
* Withdrawals remain available via fallback processes governed by the protocol.\ <br>


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