TLDR Summary
Grvt is introducing the Grvt Yield Layer that automatically invests idle exchange reserves into Ethereum L1 DeFi protocols (starting with Aave V3 - USDT pool), generating returns while keeping your trading and withdrawals unaffected. Most withdrawals stay instant. In rare cases of high demand, a queued withdrawal system with an enforced deadline guarantees your withdrawals are always processed. |
1) What is the Grvt Yield Layer?
Previously, all assets held on Grvt, the Total Value Locked (TVL), sat unused inside a secure vault on Ethereum's main chain (L1). With the Yield Layer, the majority of these reserves are now automatically deployed into yield-generating DeFi protocols, starting with Aave V3 using USDT.
This is made possible by a new smart contract called the Grvt DeFi Vault, which sits on Ethereum mainnet (L1) and manages the flow of funds between:
The L2 (Grvt validium private chain) where your account, positions and trades live
The L1 DeFi protocols
2) How does it work?
The Yield Layer runs automatically in the background through four steps:
Step 1 – Funds pool on L1. The majority of Grvt's TVL moves into the L1 DeFi Vault rather than sitting idle.
Step 2 – Yield is generated. The vault allocates funds to DeFi protocols (starting with Aave V3 - USDT pool), earning yield continuously.
Step 3 – L2 holds a small operational balance. Your trading chain maintains just enough funds for day-to-day operations, capped at a preset maximum.
Step 4 – Automated rebalancing. A Fund Manager Service monitors balances and moves funds between L1 and L2 as needed, keeping withdrawals fast.
3) Withdrawals: what changes?
Withdrawals to Supported Chains (e.g. Arbitrum)
No changes. Withdrawals operations remain near-instant via our bridging partners.
Withdrawals to Ethereum L1
For the vast majority of withdrawals, nothing changes, they remain fast and near-instant. However, because L2 now holds a smaller operational balance, very large withdrawals may occasionally enter a short processing queue.
Standard withdrawal (most cases)
L2 has sufficient funds to cover the request
Follows the existing fast, synchronous process
Funds transfer from L2 to L1 and finalize automatically
Queued withdrawal (rare cases)
L2 temporarily does not have enough to cover the full request
Your withdrawal is accepted and confirmed immediately, funds are reserved at that moment
It enters a First-In, First-Out (FIFO) queue with an enforced deadline of. 2 hours.
The automated system tops up L2 from L1 and clears the queue
Your withdrawal is always guaranteed. Even in the queued scenario, your funds are reserved the moment your withdrawal is accepted. A chain halt mechanism ensures the queued withdrawals are processed before the deadline or the chain stops. You will notice a slightly longer processing time, but finalization is guaranteed. |
Note: The existing withdrawal history API is preserved. Confirmation is issued immediately on acceptance, even if the funds are not yet available on L2.
4) Safety & risk controls
Grvt has built multiple layers of protection into the Yield Layer:
Approved protocols only
The Grvt Vault Administrator must explicitly approve any yield protocol before funds can be deployed to it. No unauthorized or untested integrations can access exchange reserves.
Fund isolation
The L1 DeFi Vault can only move funds between the L2 Exchange Contract and approved yield protocols. It cannot send funds to arbitrary external addresses, ever.
Global pause mechanism
Authorized chain administrators can trigger an emergency pause at any time. This immediately stops:
New yield allocations (e.g. supplying additional funds to Aave)
Rebalancing that moves funds away from the L2 exchange
The pause does not block the ability to pull funds back to L2. Emergency rescue paths remain open at all times.
5) FAQs
Q: Are funds held in the yield layer still self-custodial?
Yes, funds remain self-custodial. Self-custody isn't defined by where funds sit, but by who holds the authority to move them. In the GRVT Yield Layer, the "custodian" is a transparent, immutable smart contract rather than a centralized entity.
Programmatic Sovereignty: The DeFi Vault is hardcoded to interact only with specific, audited yield protocols and the L2 exchange. It is technically impossible for the system to redirect your capital to an unauthorized or arbitrary address.
No Unilateral Access: Neither GRVT nor any third party can "withdraw" your funds for their own use. Your authorization, granted through your interactions with the platform, is the only trigger for fund movement.
Transparency: Because these rules are written into the smart contract code on-chain, the safety of your assets is verifiable by anyone, at any time, rather than relying on a "trust us" promise.
Q: Will this affect my trading experience?
No. The Yield Layer runs entirely in the background. Your trading, deposits, and most withdrawals continue exactly as before.
Q: What happens if Grvt's L2 balance is low when I withdraw?
Your withdrawal is immediately accepted and confirmed, then placed in a queue with an enforced deadline of 2 hours. The system tops up L2 from L1 and processes it in order. You will not lose your place or your funds.
Q: What is Aave V3, and is it safe?
Aave V3 is one of the largest and most battle-tested DeFi lending protocols, managing billions in assets. Grvt starts with USDT on Aave V3 as the initial strategy. Any future protocols require explicit approval before use.
Q: What is the difference between L1 and L2?
L1 is the main Ethereum blockchain, where the DeFi Vault and yield protocols live. L2 is Grvt's ZKSync-based trading chain, where your account, positions and trades are managed. Funds move between them automatically.
Q: Can user funds ever leave Grvt's system?
No. The L1 DeFi Vault is programmed to only interact with the L2 Exchange Contract and approved yield protocols. It cannot send funds to arbitrary external addresses under any circumstances.
Q: What if there is an emergency with a DeFi protocol?
Grvt can trigger a global pause to stop all new yield allocations and can fully exit any protocol instantly via an emergency withdrawal. Funds can always return to the L2 exchange contract.