# Deposits

When a user allocates funds to a vault, they are issued vault shares corresponding to the increase in Net Asset Value that they contribute to the vault. The following sequence of actions takes place:

1. User initiates a deposit. This is expressed in USDC

2. The vault calculates the Net Asset Value: NAV = SUM(asset_i * price_i)

3. Your vault share % is calculated: Share = Deposit/(Deposit+NAV)

4. New vault shares are issued to the depositor s.t.:

$Share = NewlyIssued/(NewlyIssued + Outstanding)$

so that the amount of newly issued shares:

$NewlyIssued = Share*Outstanding/(1-Share)$

As a depositor, I get the amount of vault shares corresponding to the USDC value of my deposit, relative to dollar amount of vault Net Asset Value

Example:

1. Bob wants to deposit 100 USDC into a vault of their choice

2. The vault currently has a Net Asset value of 1000 USDC

3. Bobβs share would be: Share = 100/(100+1000) = 0,0909 or 9,09%

4. Suppose that the vault had 500 shares outstanding. This would mean that:

NewlyIssued = 0,0909*500/(1-0,0909) = 49,99 which is the number of new vault shares issued to Bob

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