Vault valuation

In Lagoon, the valuation of the vault is injected into the smart contract by the Valuation Oracle. The accuracy of this value is crucial since it will determine:

• the amount of shares a user will get.

• the amount of assets a user will get at redemption.

• the amount of performance fees taken.

For greater security, a vault valuation requires a second step: the curator must approve the valuation proposed by the Valuation Oracle. Learn more here.

Why a 2-steps procedure ?

Valuation is a critical factor in ensuring the vault's correct operation. To support this, it’s essential to give vault administrators flexibility in their valuation process. This 2-steps approach offers several benefits:

• Customizable address selection – Admins can choose relevant addresses for valuation.

• Curator control limits – Reduces excessive curator influence.

• Enhanced oversight – Increases the number of entities required to review valuation proposals.

The valuation must exclusively contain the positions held on the curator address at the moment of the call. Consequently, vault valuation must not take into account the pending requests.

Another consequence is that the first valuation update will be at 0.

The valuation can be computed off-chain but it can also be based on a smart contract responsible to fetch the data on-chain.

You can find how to update the valuation here.