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Version: Endpoint V2

Omnichain Vaults (OVault)

Omnichain Vaults extend the ERC-4626 tokenized vault standard with LayerZero's omnichain messaging, enabling users to deposit assets from any chain and receive yield-bearing vault shares on their preferred network in a single transaction.

What Are Omnichain Vaults?​

  • Beyond single-chain vaults:
    Traditional ERC-4626 vaults restrict users to depositing and withdrawing on a single blockchain. OVault removes this limitation by making vault shares omnichain fungible tokens (OFTs) that can move seamlessly between any LayerZero-connected chain.

  • Hub-and-spoke architecture:
    The vault itself lives on one "hub" chain, while users can interact with it from any "spoke" chain. This design maintains the security and simplicity of a single vault while providing universal access across the entire omnichain ecosystem.

OVault Comparison OVault Comparison

Mental Model: Two OFT Meshes + Vault​

To understand OVault architecture, think of it as two separate OFT meshes (asset + share) connected by an ERC-4626 vault and composer contract on a hub chain:

  • Asset OFT Mesh: Enables the vault's underlying assets (e.g., USDT) to move across chains using standard OFT implementation
  • Share OFT Mesh: Enables vault shares to move across chains, using OFTAdapter (lockbox model) on the hub chain and standard OFT elsewhere
  • ERC-4626 Vault: Lives on the hub chain, implements standard deposit/redeem operations
  • OVault Composer: Orchestrates cross-chain vault operations by receiving assets or shares with special instructions and coordinating the vault interactions with OFT transfers

Key insight: Users never interact directly with the vault - they send assets or shares cross-chain to the composer with encoded instructions, and the composer handles all vault operations and transfers out to the target destination.

This design leverages existing LayerZero standards (OFT + Composer) to make asset movement seamless between multiple blockchains.

Why Omnichain Vaults Matter​

  • Unified liquidity across chains:
    Instead of fragmenting liquidity across multiple single-chain vaults, OVault aggregates all deposits into one vault. This creates deeper liquidity, more efficient yield generation, and simpler management for vault operators.

  • Seamless user experience:
    Users no longer need to bridge assets manually, switch networks, or manage multiple transactions. A single transaction handles the entire flow—from depositing assets on one chain to receiving shares on another.

  • Cross-chain DeFi composability:
    Vault shares as OFTs can be used as collateral, traded on DEXs, or integrated into any DeFi protocol on any chain. This unlocks new possibilities for yield-bearing assets in the omnichain ecosystem.

How Omnichain Vaults Work​

  1. Asset deposit flow:
    When a user deposits assets from a source chain, the OVault system:

    • Transfers the assets to the hub chain via LayerZero's OFT standard
    • Executes the deposit workflow via LayerZero's Composer standard which:
      • Deposits assets into the ERC-4626 vault
      • Mints vault shares
      • Sends the shares to the user's desired destination chain address via the OFT standard

  2. Share redemption flow:
    When redeeming shares for underlying assets:

    • shares are sent from the user's current chain back to the hub
    • The vault redeems shares for the underlying assets
    • assets are then sent to the user's chosen destination chain address

  3. Automatic error recovery:
    If any step fails (due to slippage, gas issues, or configuration errors), the OVault Composer provides permissionless recovery mechanisms to refund or retry the operation, ensuring users never lose funds.

Core Design Principles​

  • Full ERC-4626 compatibility:
    OVault maintains complete compatibility with the ERC-4626 standard. The vault contract itself is a standard implementation—the omnichain functionality is added through LayerZero's OFT and Composer patterns.

  • Deterministic pricing:
    Unlike AMM-based systems, ERC-4626 vaults use deterministic share pricing based on totalAssets / totalSupply. This eliminates the need for oracles and reduces cross-chain complexity.

  • Permissionless recovery:
    All error recovery functions are permissionless—anyone can trigger refunds or retries for failed operations. This ensures that users always have a path to recover their assets without relying on admin intervention.

  • Configurable security:
    Vault operators can configure their security settings, including DVN selection, executor parameters, and rate limits, to match their risk tolerance and use case requirements.

Common Use Cases​

  • Yield-bearing stablecoins:
    Issue stablecoins backed by yield-generating vaults where users can mint and redeem from any chain while the underlying yield accrues to all holders.

  • Real World Asset (RWA) tokenization:
    Deploy RWA vaults on regulated chains while providing global access. Users worldwide can gain exposure to real-world yields without jurisdictional limitations.

  • Cross-chain lending collateral:
    Use vault shares as collateral on any chain. As the shares appreciate from yield accrual, borrowing power automatically increases.

  • Omnichain yield aggregation:
    Aggregate yield strategies from multiple chains into a single vault, giving users exposure to the best opportunities across the entire ecosystem.

Integration with LayerZero Standards​

  • Built on OFT Standard:
    Both the asset and share tokens use LayerZero's OFT standard for cross-chain transfers, ensuring consistent supply accounting and seamless movement between chains.

  • Leverages Composer Pattern:
    The OVault Composer handles complex multi-step operations (receive assets → deposit → send shares) in a single atomic transaction with automatic error handling.

  • Protocol-level security:
    Inherits LayerZero's security model with configurable DVNs, executors, and rate limiting to protect cross-chain operations.

Further Reading​

For implementation guides and technical details: