> For the complete documentation index, see [llms.txt](https://smilee-finance.gitbook.io/arbitrum-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://smilee-finance.gitbook.io/arbitrum-docs/protocol-design/vaults.md).

# Vaults

Smilee protocol is based on two main contracts:

1. **Decentralized Volatility Products (DVPs).**
2. **Earn Vaults.**

{% hint style="warning" %}
At the smart contract level, the Earn Vault is simply called Vault.
{% endhint %}

**Both DVPs and Earn Vaults are defined by:**

* A Reference Token (e.g. ETH, wBTC, …)
* A Maturity Frequency (e.g. daily, weekly, …)

## Impermanent Gain Earn Vaults

Earn Vaults provide the liquidity needed to mint and trade Impermanent Gain.

The Vault is divided into user shares which are represented by **ERC20 Tokens.**

The Vault replicates the payoff of a DEX Concentrated Liquidity position on the pair with a base token (typically USDC) and the reference token. The range is automatically selected using a multiple of the reference token volatility and it is auto re-balanced at maturity. \
To know more, please refer to the section: [Payoff, APY & Performance](/arbitrum-docs/impermanent-gain/earn/payoff-apy-and-performance.md).