Documentation
Everything you need to know about Avocado Fund — the decentralised USDC yield vault and identity-gated lending protocol on Arbitrum.
Overview
Avocado Fund is a two-sided DeFi primitive. On one side, lenders deposit USDC into an ERC-4626 vault and receive yield generated from borrower interest. On the other, borrowers verified by Persona (government ID + selfie + sanctions screening) build an on-chain AVO Score (0–100) through repayment history — earning credit tiers from $25 to $10,000. Fully on-chain and non-custodial.
Earn Passive Yield
Deposit USDC and earn competitive APY as borrowers pay interest. Withdraw any time within available liquidity.
On-Chain Reputation
Persona KYC confirms a real human. AVO Score (0–100) grows with on-time repayments. All tracked transparently on the blockchain.
ERC-4626 Compatible
The vault follows the ERC-4626 tokenised vault standard, making it composable with the broader DeFi ecosystem.
Non-Custodial
Smart contracts hold all funds. The protocol team cannot move user assets. All code is open source.
How It Works
The system has two smart contracts: AvocadoVault (ERC-4626 deposit/yield) and AvocadoLending (credit lines). They work together so that lender capital flows to borrowers and interest flows back.
Lenders
deposit USDC
AvocadoVault
ERC-4626
AvocadoLending
credit lines
Borrowers
AVO Score verified
Interest paid by borrowers → distributed back to lenders as yield
Lenders supply USDC
Any wallet can deposit USDC into the AvocadoVault. The vault mints avUSDC shares proportional to the deposit. These shares appreciate over time as borrower interest accrues.
Capital is deployed to lending
The vault allocates USDC to the AvocadoLending contract. Utilisation is tracked on-chain and displayed in real-time. A cap of $5,000,000 limits total exposure.
Borrowers verify with Persona
Borrowers open the Borrow page, complete a Persona inquiry (government ID + selfie + sanctions check), and receive a credit limit tied to their verified identity.
Borrowers draw and repay USDC
Verified borrowers draw up to their credit limit. Interest accrues per second. Repayments reduce the principal and release the credit line for future use.
Lenders withdraw any time
Lenders burn their avUSDC shares to redeem USDC + accrued interest. Withdrawals are limited by available (non-deployed) liquidity.
The Vault (AvocadoVault)
The vault is a standard ERC-4626 tokenised vault. Depositors receive avUSDC shares that represent their proportional claim on all assets inside the vault — including interest earned.
Share price starts at 1.000000 and increases as interest accrues. Depositing 100 USDC when share price is 1.05 gives you ~95.24 avUSDC. Redeeming those shares later at 1.10 returns 104.76 USDC.
Key vault functions
deposit(assets, receiver)Deposit USDC, receive avUSDC shareswithdraw(assets, receiver, owner)Burn shares, receive USDCredeem(shares, receiver, owner)Burn exact shares, receive USDCconvertToAssets(shares)Preview USDC value of sharestotalAssets()Total USDC owned by vaultsharePrice()Current price per avUSDC share × 1e6Lending & Borrowing
The AvocadoLending contract manages credit lines for Persona-verified borrowers. Each verified human gets exactly one credit line — enforced off-chain via a PII-derived nullifier hash stored at verification time.
Up to $10,000 USDC
Credit limit
per verified human
12% APR fixed
Interest rate
accrues per second
None required
Collateral
Persona KYC is the collateral
Interest rate model
Avocado Fund uses a fixed 12% APR on all borrowings. Interest accrues per second on the outstanding principal. Lender yield from that 12% scales with vault utilisation — the more capital deployed, the higher the effective lender APY.
Loans not repaid within 30 days are considered overdue. The admin may mark overdue accounts as defaulted on-chain. A default immediately sets your AVO Score to 0 and drops your credit tier. On-time repayments are the primary way to grow your AVO Score and unlock higher credit limits.
AVO Score — How It's Calculated
Your credit limit is determined by your AVO Score (0–100) — a composite of 7 pillars. Persona KYC is required to access any credit (disabled state returned without it). A sanctions hit or active default forces score to 0.
Typical new borrower progression
AVO Score — Credit Tier Gates
All three conditions must be met simultaneously to unlock each tier. Only on-time repayments count toward the loan gate — late payments do not advance your tier. Full Tier 5 ($10,000) requires Persona approved status (not just completed).
Only on-time repayments count toward the repayment gate — late payments (after 30 days) do not advance your tier. Max credit of $10,000 is unlocked after 365 days of on-time repayment history.
Identity Verification (Persona)
Avocado Fund uses Persona for regulated identity verification. Each borrower completes a hosted inquiry that captures a government-issued ID, a liveness-checked selfie, and runs a sanctions / PEP / adverse media watchlist screen. Persona is the data controller for the raw documents — Avocado Fund receives only a cryptographic reference.
Open the verification flow
On the Borrow page, click "Verify your identity". The Persona widget opens inline; no redirect or separate app is required.
Capture ID + selfie
Upload a government-issued ID (passport, driver's licence, or national ID) and complete a short liveness-checked selfie. Persona extracts and authenticates the document.
Sanctions & PEP screen
Persona automatically runs the captured identity against global sanctions, PEP, and adverse media lists. A hit blocks approval.
Nullifier recorded
Once Persona delivers an `inquiry.approved` webhook, we derive two nullifiers: one per inquiry (replay / idempotency) and one from PII (sybil resistance across wallets). Both are stored locally against your wallet address.
Credit line activated
Verification unlocks borrowing immediately. Your credit limit is determined by your AVO Score on first use and grows as you repay.
Persona holds the raw ID document and selfie for its standard 7-year regulatory retention window. Avocado Fund stores only the inquiry id and a salted PII hash — no direct identifiers.
Yield & APY
All yield is real — it comes from borrower interest, not token inflation or subsidies. APY is variable and reflects real-time utilisation of the vault.
APY calculation
grossInterest = borrowedAssets × borrowAPR × (seconds / 31536000)
netInterest = grossInterest × (1 − performanceFeeBps / 10000)
lenderAPY = netInterest / totalAssets × 100
Interest accrues per second. The share price increases continuously as borrowers repay. There is no staking or claiming — your avUSDC shares automatically appreciate.
APY is variable. If utilisation drops (more repayments, fewer new borrows) the displayed APY will decrease. Historical APY charts are available on the Analytics page.
AVO Token
The AVO token is not yet live. At launch, only AvocadoVault (lend → avUSDC) and AvocadoLending (borrow) are deployed. All yield currently comes from real borrower interest paid into the vault.
AVO is the governance and incentive token of Avocado Fund. Total supply is capped at 1 billion tokens. Initial distribution covers team, advisors, treasury, and community incentives. Team and advisor allocations are locked in the on-chain TokenVesting contract with standard cliff + linear-vest schedules.
Token Vesting
Vesting schedules will be created on-chain at TGE. Until then, the TokenVesting contract address is a placeholder.
The TokenVesting contract holds team and advisor AVO allocations and releases them on a per-beneficiary cliff + linear vest schedule (founders: 12-month cliff, 24-month linear vest; advisors: 6-month cliff, 18-month linear vest). Beneficiaries call release() to claim whatever has vested at the current block time. Schedules marked as revocable can be revoked by the owner multisig (e.g. on a departure) — vested tokens still go to the beneficiary; unvested tokens return to the treasury.
For Lenders
Supply USDC to earn passive yield. No lock-up period, no liquidation risk. Your position is represented by avUSDC shares.
Connect your wallet
Connect an Arbitrum-compatible wallet (MetaMask, Coinbase Wallet, Rainbow, etc.) using the Connect Wallet button in the top navigation.
Get USDC on Arbitrum
Bridge USDC to Arbitrum using the Arbitrum Bridge or Coinbase. The vault accepts native USDC on Arbitrum.
Approve and deposit
Enter an amount on the Vault page → Supply tab. First-time depositors will need to approve the vault contract to spend USDC. The approval and deposit can happen in one flow.
Monitor your position
Your avUSDC balance and USDC value are shown in real-time on the Vault page. Analytics shows historical APY and vault health.
Withdraw any time
Switch to the Withdraw tab, enter an amount (up to your maxWithdraw), and confirm. You receive USDC + accrued interest immediately.
Withdrawals are limited by available liquidity (non-deployed assets). If utilisation is very high, some of your position may be temporarily illiquid until borrowers repay. The maxWithdraw value shown in the app reflects this in real time.
For Borrowers
Borrow USDC without collateral after a Persona identity check. Designed for real humans with real use cases — not bots or sybil attacks.
Prepare your documents
Have a government-issued ID ready (passport, driver's licence, or national ID). Persona supports document verification in 200+ countries.
Connect your wallet
Connect the wallet you want to receive USDC into. This wallet will be linked to your Persona inquiry — use a dedicated wallet for borrowing.
Verify on the Borrow page
Go to Borrow → Verify tab. The Persona inquiry opens inline; follow the prompts to capture your ID and a short selfie. Sanctions screening runs automatically.
Draw your credit line
Once verified, the Borrow tab activates. Enter an amount up to your credit limit and confirm. USDC is sent to your wallet immediately.
Repay within 30 days to protect your AVO Score
Use the Repay tab to repay part or all of your balance. Repay within 30 days for an on-time mark — this advances your AVO Score and unlocks higher tiers. Interest accrues per second at 12% APR until fully repaid.
Build history to unlock higher credit
Each on-time repayment increases your AVO Score. Account age is tracked automatically. Once you hold a score ≥ 78 and have repaid 8+ loans with your account aged ≥ 365 days, you reach Tier 5 Elite — the maximum $10,000 credit limit.
30-day repayment window: Loans aged over 30 days are considered overdue. The admin may call defaultLoan() on-chain for overdue accounts. Default consequences: 1st default → Tier 1 cap ($50), 2nd default → Tier 0 ($25), 3rd+ → account locked. Only on-time repayments count toward tier advancement — late payments do not.
Default consequences
Security
Non-custodial
All USDC is held by the smart contracts. The protocol deployer has no ability to withdraw user funds.
Open source contracts
All contract code is publicly available on GitHub. Verify every function yourself before interacting.
Vault cap
Deposits are capped at $5M to limit protocol exposure during early operation. The cap may increase post-audit.
Reentrancy protection
All state-mutating functions use OpenZeppelin's ReentrancyGuard to prevent reentrancy attacks.
Sybil resistance
PII-derived nullifier hashes (from Persona inquiry data) prevent the same human from opening multiple credit lines, even with multiple wallets.
Performance fee
A 10% performance fee on interest is the only revenue mechanism. There are no hidden fees or dilution.
Smart contracts have been audited by Omniscia across 4 rounds — 22 findings identified (4 static + 18 manual), all remediated. 124 tests pass. Both contracts are live on Arbitrum One. View the public audit report → Only deposit amounts you are comfortable with. The vault cap limits total protocol exposure.
Frequently Asked Questions
Is Avocado Fund audited?
Yes. A formal external audit was completed by Omniscia across 4 rounds — 22 findings (4 static + 18 manual), all remediated. No critical findings. 124 automated tests pass. Both contracts are live on Arbitrum One. Read the public audit report. Only deposit what you can afford to risk.
What chain is this on?
Avocado Fund is deployed on Arbitrum — an Ethereum L2 rollup. Gas fees are very low (typically under $0.01). You need ETH on Arbitrum for gas and USDC on Arbitrum to supply.
Can I lose money as a lender?
Yes — in theory. If borrowers default and the total bad debt exceeds available reserves, lender funds could be at risk. The vault cap, credit limits, and identity gating are all designed to minimise this risk. Lending to uncollateralised borrowers always carries some credit risk.
Why does my maxWithdraw show less than my balance?
Your maxWithdraw is capped by available (non-deployed) liquidity. If the vault is highly utilised, some of your balance is lent out. As borrowers repay, your withdrawable amount increases. Check the utilisation rate on the Analytics page.
How does Persona verification work technically?
Persona opens an embedded inquiry widget that captures a government-issued ID, a liveness-checked selfie, and runs a watchlist / PEP / adverse-media screen. When the inquiry is approved, Persona sends an HMAC-signed webhook to our server. The server re-fetches the authoritative inquiry from the Persona REST API, derives a salted PII hash (for cross-wallet sybil defence), and records both the inquiry nullifier and the PII nullifier locally against your wallet.
Can I have multiple credit lines with different wallets?
No. A PII-derived nullifier hash (salted, one-way) is computed from your Persona inquiry and stored in a dedicated namespace. Attempting to verify with the same real identity on a different wallet collides on that hash and is rejected.
When is my loan due?
Loans have a 30-day soft deadline. Interest accrues per second at 12% APR — there is no automatic force-liquidation, but loans unpaid beyond 30 days are flagged as overdue. The admin may then call defaultLoan()on-chain. Repaying before 30 days counts as “on-time” and grows your AVO Score.
What is the AVO Score?
AVO Score (0–100) is your on-chain reputation. It is calculated from: Persona KYC (up to 15 pts), on-time repayment history (up to 30 pts), account age (up to 10 pts), repayment volume (up to 10 pts), and credit utilization (3–10 pts based on debt-to-limit ratio — zero outstanding debt earns full 10 pts). Your score determines your credit tier. Max credit ($10,000) requires score ≥ 78, 12 on-time repayments, and 365 days of account age.
What happens if I don't repay within 30 days?
Interest keeps compounding, increasing your debt. If the admin marks the loan as defaulted: 1st default → credit capped at Tier 1 ($50); 2nd default → Tier 0 ($25); 3+ defaults → account locked out entirely (admin must re-enable). Late repayments (after 30 days) do not count toward tier advancement — only on-time repayments build your AVO Score.
How do I increase my credit limit?
Repay loans on time, build account age, and complete Persona KYC. Your AVO Score auto-updates after each repayment. The full progression: after KYC → $50 (Tier 1); 1 repayment + 14 days → $150 (Tier 2); 3 repayments + 30 days → $500 (Tier 3); 7 repayments + 90 days → $2,000 (Tier 4); 12 repayments + 365 days → $10,000 (Tier 5).
What is the performance fee and where does it go?
10% of all interest earned is taken as a performance fee, sent to the protocol treasury address at the time interest is collected. The remaining 90% accrues to lenders via share price appreciation.
Is there a token?
Yes — AVO is the native token (ERC-20, 1B max supply cap). Team and advisor allocations are locked in the on-chain TokenVesting contract (cliff + linear vest). At launch, AVO is not yet live; it will be activated in a future update. avUSDC is a separate yield-bearing receipt token representing your vault deposit. All vault yield is sourced from real borrower interest.
How do I get support?
Open an issue on GitHub or reach out via the community channels linked in the footer. For security disclosures, please use responsible disclosure by emailing the security contact in the repository.
Ready to start?
Supply USDC to earn yield, or verify your identity with Persona to access a credit line.