FAQs
Clear answers to common questions about how the Savings Vault works, including deposits, yield, risks, and Shariah alignment.
Section 1: General & Product Basics
What is The LifeDAO Savings Vault?
The LifeDAO Savings Vault is a non-custodial, digital savings facility built on blockchain technology. It allows members to deposit USDC (a stablecoin), earn variable yield from decentralized finance (DeFi) trading fees, and withdraw their funds at any time. It is not a bank account, investment fund, or regulated financial product.
Who is this product for?
The Vault is designed for:
Users who want a safe place for short-term savings (e.g., emergency funds, daily expenses).
Individuals seeking ethical, Shariah-aligned finance (no interest).
People who want full control over their money without relying on banks.
Users new to DeFi who want a simple "set and forget" savings experien
Is the Savings Vault a bank account?
No. It is a smart-contract-based system operating on public blockchains. It interacts with DeFi protocols on your behalf. All funds deposited to the Savings Vault remain fully under your control, you may withdraw and transfer your funds without permission from any other party. It is not a bank account.
Is this an investment product?
No. The Vault is savings-oriented. It prioritizes capital preservation and liquidity over high returns. The Savings Vault is based on stablecoins which are pegged to the US Dollar and experience minimal capital fluctuation (when measured against the USD$). Yield is generated from trading fees that are enabled by USDC deposited to decentralized exchanges. Unlike investments, there is no expectation of capital loss in the Savings Vault under normal circumstances.
Section 2: Deposits, Withdrawals & Access
What asset can I deposit?
At launch, the Vault accepts USDC (USD Coin) on Ethereum, Arbitrum, Base, Optimism, Polygon and Binance Smart Chain. Future support for other Shariah-compliant stablecoins may be added. Do not send unsupported assets—they may be irretrievably lost.
How do I deposit funds?
Log in to your The LifeDAO account / Life Wallet.
Click "Deposit" and enter the amount of USDC.
Confirm the blockchain transaction.
Your funds are transferred directly to the Vault’s smart contract.
Can I withdraw my money at any time?
Yes. Withdrawals are permissionless and executed by smart contracts. You retain full ownership and can withdraw on demand, subject to blockchain network conditions and underlying liquidity. For more information on liquidity risks, please refer to The Whitepaper.
Are there lock-up periods?
No. There are no fixed lock-ups. You can withdraw your full balance (principal + earned yield) at any time.
What happens if I lose access to my account?
The Vault is non-custodial. The LifeDAO cannot recover your funds if you lose access credentials (email, authentication, or wallet keys). You are solely responsible for securing your access methods.
Section 3: Yield & Profit-Sharing
How is yield generated?
Yield is generated exclusively from liquidity provision fees on decentralized exchanges (e.g., Uniswap V3). When users swap between stablecoins (USDC/USDT), they pay a small fee. A portion of that fee is distributed to the Vault and, in turn, to members.
What is the expected yield?
The indicative target is 4–6% APY. This is not guaranteed. Yield is variable, market-dependent, and can be lower (or temporarily zero) during periods of low trading activity.
What is the Mudarabah profit-sharing structure?
The Vault operates on an Islamic finance principle called Mudarabah:
Members are the capital providers (Rab-ul-Maal).
The LifeDAO acts as the manager (Mudarib).
Gross yield is split according to a pre-agreed ratio.
The Member share varies by tier (typically ~80% or more).
0% to 20% of gross yield goes to the Community Fund (Mudarib share)
What is the Community Fund?
The Community Fund is a protocol-level pool funded by the Mudarib share of yield. It supports:
Protocol development & security audits
Ecosystem incentives
Operational costs
Member-benefit initiatives
These funds are not withdrawable by individual members.
Is the yield considered interest (Riba)?
No. The yield is derived from fees for providing liquidity not from lending money at interest. This structure is designed to be Shariah-compliant.
Section 4: Risks & Disclaimers
Is my principal guaranteed?
No. Principal is not guaranteed. While the Vault uses stablecoins and conservative strategies, losses can occur due to:
Smart contract vulnerabilities
Stablecoin de-pegging
Impermanent loss (though minimal in stablecoin pairs)
DeFi protocol failure
What is "impermanent loss" and does it apply here?
Impermanent loss occurs when the price of assets in a liquidity pool diverges. Because the Vault uses stablecoin pairs (USDC/USDT), price divergence is minimal. However, small deviations can still result in reduced returns or minor capital impact.
What happens if a stablecoin de-pegs?
Stablecoins such as USDC and USDT rely on underlying reserves and market confidence. In exceptional circumstances, they may trade above or below their $1 peg. The Vault does not guarantee price stability. If a de-pegging event occurs, it may negatively affect the value of your holdings. Historically, most de-pegging events have been resolved within a few hours.
Are my funds insured?
The LifeDAO is the sole custodian of all Savings Vault deposits, and Members bear the associated custody and operational risks.
What is smart contract risk?
Smart contracts are code. Bugs or vulnerabilities could be exploited, potentially leading to loss of funds. The Vault’s contracts are audited by professional firms, but audits do not eliminate all risk.
What is liquidity risk?
Liquidity risk refers to the possibility that withdrawals may be delayed or subject to slippage during:
Sudden surge in withdrawal requests
Extreme market stress
Imbalances in the underlying stablecoin pool
The Vault uses deep liquidity pools to mitigate this, but risk cannot be fully eliminated.
Section 5: Operations, Rebalancing & Safeguards
What is "rebalancing"?
Rebalancing is the process of adjusting the Vault’s liquidity position on Uniswap to keep it within an optimal price range for earning fees. If the market price moves outside the active range, the position becomes idle until rebalanced.
How often does rebalancing happen?
Only when:
The position is out of range for 24 continuous hours (grace period).
A new range is selected using a 10-minute Time-Weighted Average Price (TWAP).
Rebalancing happens roughly once every 7 days.
Who controls rebalancing?
In Phase 1, rebalancing requires multisignature (multisig) approval. Multiple authorized signers must review and approve each rebalancing transaction. This manual step prioritizes security over speed.
Will rebalancing ever be automated?
In Phase 1, rebalancing requires multisignature (multisig) approval. Multiple authorized signers must review and approve each rebalancing transaction. This manual step prioritizes security over speed.
What are "emergency procedures"?
In rare, high-risk events (e.g., critical bug, severe protocol failure), The LifeDAO may:
Pause non-essential operations
Delay rebalancing
Restrict new deposits
Emergency actions never grant control over user funds and are temporary.
Section 6: User Responsibilities & Legal
Do I need to complete KYC to use the Vault?
The Vault itself is non-custodial and does not require KYC. However, access may be linked to a LifeDAO account (email/password), which may involve KYC for other products (e.g., LifeCard, Life Protection).
Am I responsible for my own taxes?
Yes. Members are solely responsible for:
Determining taxability of deposits, withdrawals, and yield
Reporting and paying any applicable taxes
Complying with local laws
The LifeDAO does not provide tax advice or reporting.
Is the Savings Vault regulated?
No. The Vault is not regulated, supervised, or licensed by any financial authority. It operates as a decentralized protocol.
Section 7: Shariah Compliance
Is the Savings Vault Shariah-compliant?
The Vault is structured to avoid:
Riba (interest)
Gharar (excessive uncertainty)
Maysir (gambling)
Yield is generated from non interest-bearing lending and not guaranteed. A dedicated Shariah paper is available for review.
Has a Shariah board reviewed the product?
The whitepaper references a Shariah Board and a dedicated Shariah paper. Users are encouraged to review that document for detailed compliance opinions.
Section 8: Technical & Infrastructure
What blockchain and protocols does the Vault use?
Blockchain: Arbitrum
DEX: Uniswap V3 (with future support for V4).
Assets: USDC (deposit), USDT (paired in liquidity pool).
Wallet: Integrated with The LifeDAO Life Wallet.
Do I need to understand DeFi to use the Vault?
No. The Vault is designed to feel like a familiar online savings account. All complex operations (liquidity provision, rebalancing, fee collection) are handled automatically behind the scenes.
Can I see my balance and yield in real time?
Yes. Your dashboard displays your deposit + accrued yield in real time. All transactions are visible on the blockchain.
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