How it works

Trading pays a fee, the fee becomes USDG, and the USDG raises the vRENT price once a month.

The monthly loop

Every month runs through the same six steps. The first three happen during the month. The last three happen on rent day, the 1st of the following month (UTC). Each step that moves money is a public transaction on Robinhood Chain.

1. $RENT trades pay a creator fee. Every buy and every sell of $RENT on Pons 2 pays a fee, set to 1% in the site's configuration. The fee accrues to the token's creator in ETH.
2. The operator claims the fee. During the month the operator claims the accrued ETH from Pons into the owner wallet, for example once a week.
3. The ETH becomes USDG. At the month's end the operator swaps all the claimed ETH to USDG on Robinhood Chain.
4. The USDG goes into the vault. On rent day the operator calls addCapital on the vault with the USDG. No vRENT is minted against it. The operator keeps 0%, so every USDG the swap produced goes in.
5. The vRENT price rises. The vault holds more USDG for the same number of shares, so each vRENT redeems for more.
6. The Roll is published. The operator publishes the month's Roll, which names each claim, the swap and the settlement by transaction hash, and writes the file's SHA-256 hash and the closing price to the RollRegistry contract.

Under normal operation rent day is the only day of the month the price moves. Deposits and cash-outs during the month happen at the current price and leave it where it is. Share price covers what moves the price and what does not.

Where the income comes from

The creator fee on $RENT trades is the vault's only income. The fee is a percentage of each trade, so a month's income depends on how much $RENT changed hands. A busy month adds more USDG, a quiet month adds less, and a month with no trading adds nothing. Nothing guarantees trading volume, and nothing makes up for a quiet month later.

The fee arrives in ETH and the vault holds USDG, so the ETH price on the day of the swap decides how many USDG a month of fees buys. Each Roll records the ETH converted, the USDG received and the rate between them.

Pons 2 applies the creator fee. If it sets a rate other than 1%, the configuration is changed to match. The Fees page has the detail.

What you own

You own vRENT, a share in an ERC-4626 vault whose single asset is USDG. vRENT has 18 decimals and USDG has 6. Your vRENT balance divided by all vRENT outstanding is your fraction of the USDG in the vault, and you can redeem it for that USDG at any time at the current price.

vRENT is a standard ERC-20 token named Rentday Vault Share. You can hold it in any wallet that supports Robinhood Chain and transfer it like any other token. It pays nothing into your wallet between deposit and redemption. Income builds up in the price: a vRENT that redeems for 1.000000 USDG today redeems for more after fees are added.

vRENT and $RENT are separate tokens. Holding vRENT gives you no $RENT, and holding $RENT gives you no share of the vault. The $RENT token explains the link between them, which runs in one direction.

What the vault holds

The vault is a contract on Robinhood Chain that holds USDG and nothing else. It has no function that sends USDG out except a holder redeeming their own vRENT, or someone they have approved doing it for them. The owner key cannot withdraw, sweep or redirect the vault's USDG.

The steps before settlement happen outside the vault. Between a claim and rent day, the fee sits in the owner wallet as ETH and then as USDG, and you rely on the operator to claim, convert and settle it honestly and on time. Once the USDG is in the vault, the operator cannot take it back. Risks covers what happens if the operator stops.

Checking each month

Every figure in the loop ends up in the Roll, and each money step is named by its transaction hash, so you can open it on the explorer and compare the amounts. Reading a Roll walks through each section and the sums you can redo by hand. Verifying a Roll shows how to confirm that the file matches the hash on chain.