How it Works
Understanding Mitosis Vault’s secure asset storage and hub asset system
The Mitosis Vault securely stores assets deposited by users on the branch chains supported by Mitosis. The representatives of those deposits are then minted as Hub Assets on the Mitosis Chain.
What are Hub Assets?
Hub Assets are tokenized representations of assets stored in Mitosis Vaults across various branch chains. When users deposit assets into a Mitosis Vault, equivalent Hub Assets are minted on the Mitosis Chain, providing a unified way to interact with cross-chain assets within the Mitosis ecosystem.
1:1 Backing
Each Hub Asset is fully backed by an underlying asset in Mitosis Vaults with guaranteed 1:1 deposit/withdrawal ratio
ERC20 Standard
Hub Assets follow ERC20 standard and maintain the same symbol as their underlying assets for seamless integration
Secure by Design
Hub assets are never utilized for VLFs unless explicitly supplied by users, ensuring complete user control
Protected Storage
Underlying assets remain safely locked in Mitosis Vault at all times, providing maximum security
Important: Hub assets are never utilized for VLFs (Vault Liquidity Frameworks); their underlying assets remain safely stored in the Mitosis Vault at all times unless users supply the hub assets to VLFs.
Deposit Flow
The deposit process involves cross-chain coordination between branch chains and the Mitosis Chain:
User Deposits Assets
User deposits 1 ETH into the Mitosis Vault on a branch chain, where it’s securely stored
Cross-Chain Messaging
Deposit information is relayed to the Asset Manager on Mitosis Chain via cross-chain messaging
Hub Asset Minting
Asset Manager mints 1 ETH (hub asset) to the user on the Mitosis Chain
Deposit Characteristics
- Immediate Processing: Deposits are processed as soon as cross-chain message is relayed
- Secure Storage: Original assets remain locked in branch chain vaults
- Proportional Minting: Hub assets are minted 1:1 with deposited assets
Withdrawal Flow
The withdrawal process reverses the deposit flow:
Withdrawal Request
User requests to withdraw 1 ETH from the Asset Manager on Mitosis Chain
Hub Asset Burning
Asset Manager burns 1 ETH (hub asset) from the user’s balance
Cross-Chain Messaging
Withdrawal information is relayed to the Mitosis Vault via cross-chain messaging
Asset Transfer
Mitosis Vault transfers 1 ETH to the user on the specified branch chain
Withdrawal Considerations
- Liquidity Checks: Withdrawals only proceed if sufficient liquidity exists on target chain
- Chain Selection: Users can specify which branch chain to receive their assets
- Proportional Burning: Hub assets are burned 1:1 with withdrawn assets
Asset Manager
The Asset Manager serves as the central coordinator for all vault operations and maintains a comprehensive ledger of cross-chain asset states.
Core Responsibilities
Deposit Coordination
Processes deposit messages and mints corresponding hub assets
Withdrawal Management
Handles withdrawal requests and burns hub assets
Liquidity Tracking
Maintains real-time ledger of liquidity across all branch chains
Cross-Chain Coordination
Manages cross-chain messaging and asset synchronization across branch chains
Liquidity Management
The Asset Manager implements sophisticated liquidity management to ensure system stability:
- Real-Time Tracking: Continuously monitors liquidity levels on each branch chain
- Threshold Management: Each chain has specific liquidity thresholds that must be maintained to prevent excessive concentration of withdrawals on single chains. The thresholds can be adjusted based on network conditions.
- Withdrawal Limits: Users can only withdraw if chain liquidity remains above threshold