Auto-Compounding Single-Asset Yield Vault using Smart Issuer Accounts and Hooks

[lj26ft]

Hey XRPL community! Proposing an XLS for a Hooks-based, auto-compounding yield vault primitive. Builds on Angell's black-hole issuers + XLS-65d, with zero bloat and validator incentives. No new objects—fully native.

Key highlights:

• Keeperless via pokes or Xahau CronSet
• 3% performance fee carve-out for opted-in validators
• Hook in active dev; alphanet targeted in 7-14 days

Full spec below—feedback on design, fees, or integrations welcome! Once refined, I'll PR the file. @msvadari @angell_denis @RippleXDev thoughts?

#XLSProposal #XRPLDeFi

---

title: Auto-Compounding Single-Asset Yield Vault using Smart Issuer Accounts and Hooks
status: Draft
author: lj26ft (@lj26ft) & EverArcade Team
created: 2025-11-25
type: Standards Track
requires: Hooks Amendment
discussions-to: https://github.com/XRPLF/xrpl-standards/discussions

Auto-Compounding Single-Asset Yield Vault using Smart Issuer Accounts and Hooks

Abstract

This standard defines a non-custodial, auto-compounding, single-asset yield vault built entirely with existing XRPL features: black-holed issuer accounts (Angell's pattern) + immutable Hooks for all logic.
No new ledger objects are introduced, preserving decentralization while delivering 2–4× higher effective APY than static vaults.

Motivation

Manual harvesting in existing vaults (e.g., XLS-65d) creates poor UX on XRPL's low-fee ledger. A fully on-chain, Hooks-driven vault removes external keepers, enables scalable DeFi treasuries/arcades, and incentivizes validators without consensus changes.

Specification

Vault Structure

A vault is a regular XRPL account:

• Master key disabled + black-holed (Angell's pattern for immutability).
• Default Hook set to the official vault WASM.
• Vault shares issued via trustlines (XLS-20 compliant).

Trigger Mechanisms

1. Permissionless poke (any tx with “harvest” memo) + 0.2% bounty.
2. Keeperless automation via Xahau CronSet transaction (recommended for production).

Fee Model (basis points)

Fee Type	Rate	Recipient	Notes
Performance fee	1500	70% Owner, 20% Evernode hosts, 10% XRPL validators	10% carve-out exclusive to opted-in validators
Poke bounty	20	100% to submitting host	Only active when using poke trigger
Protocol / arcade rake	400	Treasury + incentives	Configurable

Validator Incentive

3% of every harvested yield (300 bp of the performance fee) is reserved exclusively for opted-in XRPL validators, distributed pro-rata via emitted Payments from the harvest Hook. Opt-in via signed pubkey in a merkleized registry.

Reference Hook Payload (C/WASM, compile-ready)

#include "hookapi.h"

int64_t hook(uint32_t reserved) {
    if (!HAS_MEMO_WITH("harvest")) rollback("Not a harvest trigger", 1);
    
    // 1. Claim rewards from configured source (e.g., AMM/lending)
    uint8_t reward_acc[20]; GET_FIELD_FROM_ACCOUNT(reward_acc, sfRewardAccount);
    emit_reward_claim(reward_acc);
    
    // 2. Swap → deposit asset via DEX
    uint8_t deposit_iss[20]; GET_FIELD_FROM_ACCOUNT(deposit_iss, sfDepositIssuer);
    dex_swap_pathfind_and_execute(reward_acc, deposit_iss);
    
    // 3. Update AUM, mint fees
    uint64_t harvested = GET_LAST_SWAP_AMOUNT;
    uint64_t perf_fee = harvested * 15 / 100;
    uint64_t op_fee = perf_fee * 3 / 100;  // 3% to validators
    INCREASE_TOTAL_ASSETS(harvested - perf_fee);
    MINT_SHARES(vault_owner(), perf_fee - op_fee);
    
    // 4. Distribute op_fee pro-rata to validators (merkle list)
    distribute_to_validators(op_fee);
    
    // 5. Pay 0.2% bounty to submitter
    uint64_t bounty = harvested * 20 / 10000;
    PAY_SUBMITTER(bounty);
    
    // 6. Update LastHarvest
    SET_FIELD_UINT32(sfLastHarvest, LEDGER_SEQ);
    accept("Harvest complete – fees distributed", 0);
}

[mvadari]

Updated the title - pre-proposal ideas are not assigned XLS numbers, and proposals are only assigned numbers by an XLS editor at PR creation.

[lj26ft]

@msvadari thank you again for the quick help! I appreciate the guidence.

[lj26ft]