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Lagoon Deposit Module

The Lagoon Deposit Module, built by Lagoon Finance, lets DAMM funds tokenize and manage deposits. It uses ERC-7540, an extension of the ERC-4626 vault standard.

ERC-4626 defines a standard interface for tokenized vaults. ERC-7540 adds asynchronous deposits and withdrawals: a user's request is separate from its settlement. That lets a fund process entries and exits in batches. The result is simpler management, fairer share pricing, and better protection against front-running and mispricing in volatile markets.

For a plain-language, step-by-step version for depositors, see How to deposit.

Asynchronous deposits and withdrawals​

Lagoon splits both deposits and withdrawals into two phases: the request and the settlement.

1. Request phase​

  • Deposits. When you request a deposit, your assets move into a pending silo. No shares are minted yet, and pending funds do not earn yield. Yield starts only once the deposit is settled into the fund. You can cancel a deposit request while it is still pending in the current round, meaning until the fund's next NAV update is proposed. After that point the request is locked in and will be settled.
  • Withdrawals. Withdrawal requests are also recorded in the pending silo. On Lagoon v0.5 funds (DAMMstable, DAMMeth), withdrawal requests cannot be cancelled. This keeps the fund's liquidity and settlement predictable. Lagoon v0.6 funds (DAMMbtc) add a cancel function: a withdrawal request can be cancelled until the next NAV update is proposed, which may come before settlement.

2. Settlement and claim phase​

  • Settlement. An oracle provides the fund's net asset value (NAV). The fund manager chooses the oracle. It can be a centralized oracle run by the manager or a decentralized oracle run by an external network. Settlement frequency is not fixed either. The fund operator decides how often to update NAV and process requests: once a day, several times a day, or even every few minutes, depending on the fund's design. DAMM's funds settle periodically on no fixed schedule, sometimes days to weeks apart; contact [email protected] for timing.
  • Claiming. After settlement, users claim their shares (for deposits) or assets (for withdrawals). Until claimed, they are held by the vault contract for you, with no time limit. Settled shares keep earning yield while they wait to be claimed, so claiming late costs nothing. Settled withdrawal assets are fixed at the settlement NAV.

Why this model​

  • Batch efficiency. Settling many requests at once cuts gas costs and operational overhead.
  • Fair valuation. Everyone who settles together gets the same NAV-based price.
  • Security. Explicit claims protect users. The request rules (deposits can be cancelled until the next NAV update is proposed; withdrawals are final on v0.5 funds and cancellable only until the next NAV update on v0.6) balance flexibility with predictability.

Optional synchronous flow​

Lagoon is built around asynchronous flows. From version 0.5 it also supports an optional synchronous deposit: the oracle sets the fund's NAV, and while that NAV is within its time-to-live (TTL), a deposit mints shares in the same transaction.

Version 0.6 adds synchronous redemptions, so a v0.6 fund with a valid NAV behaves like a standard ERC-4626 vault, with no waiting.

DAMM funds currently run fully asynchronous: deposits and withdrawals are settled at the next NAV update.

Whitelisting​

Lagoon funds can restrict who may enter and exit through an address whitelist:

  • Whitelisted access. Only approved wallet addresses can deposit or withdraw.
  • Composability preserved. The restriction applies only to entering and leaving the fund. Once minted, shares are fully transferable and tradable by any address, so they stay composable across DeFi.
  • Configurable. A fund can run with or without a whitelist. It can be fully public, or limited to a private set of liquidity providers.

This lets DAMM run both open public funds and private, permissioned funds. All three DAMM funds (DAMMstable, DAMMeth and DAMMbtc) currently run in whitelist mode. To be approved, email [email protected] before you deposit.

Fees​

Lagoon supports a flexible fee model:

  • Assets under management (AUM) fee. A yearly fee, as a percentage of the fund's total assets. It is taken by diluting existing shareholders: the manager receives new shares in proportion to the fee owed.
  • Performance fee. A fee on profits. Lagoon uses a high-water mark, so the fee applies only to new net gains and never to the same profit twice.

Both fees are charged at each settlement, so they apply consistently as the strategy runs.

Lagoon v0.6 supports entry and exit fees natively. They are taken from shares when a deposit or withdrawal settles. Older v0.5 vaults (DAMMstable, DAMMeth) can only add them through external contracts. Entry and exit fees can add a surcharge on deposits or a deduction on withdrawals, to discourage short-term flows or cover transaction costs. All DAMM funds currently charge 0% entry and 0% exit fees.

Why DAMM uses Lagoon​

  • Scalable entry and exit. Handles deposits and withdrawals for many users without bottlenecks.
  • Strong risk controls. Separating request from settlement prevents mispricing and exploits in volatile markets.
  • Clean separation. Lagoon plugs straight into Safe and Zodiac, and it only handles deposits, withdrawals and share pricing. It stays out of strategy execution and fund administration.
  • Proven security. Lagoon has been audited several times and secures over $100M in TVL in production.

Further reading​