What is DeFi? (And how it differs from a Vault)

“DeFi” (decentralized finance) comes up a lot near NFTs, and KURV’s Vault sometimes gets lumped in with it. They do share one thing, both run on smart contracts, but the Vault is a much narrower tool. Here’s the difference.

DeFi in one paragraph

DeFi is the name for financial apps that run as smart contracts instead of through a bank. People use them to swap one coin for another, lend coins to borrowers, borrow against coins they hold, or pool coins together so others can trade against them. The contracts run by themselves; nobody approves each action by hand.

Common kinds of DeFi app

• Exchanges (swaps): trade one coin for another from a shared pool.
• Lending: deposit coins that others borrow.
• Borrowing: lock up coins to borrow different ones.
• Pools: put coins into a pool and receive a share of the pool’s activity.

Each has its own risks: contract bugs, prices swinging, and borrowed positions getting closed automatically when prices fall.

What a KURV Vault does

Every collection launched on KURV has its own Vault. Its job is narrow:

1. It can hold some of the collection’s coin (and it can also hold $0).
2. Whenever it holds money, it buys pieces of that collection back from holders who want to sell.
3. It can sell those pieces again.

That’s it. It isn’t a pool you deposit into, it doesn’t lend, and you don’t earn anything by holding a piece. “Nobody at KURV can move a Vault’s backing.”

The Vault’s numbers

KURV shows separate figures for each collection:

• Vault Backing: the funds the Vault holds per piece.
• Vault Exit: today’s quote for selling a piece back to the Vault.
• Vault Inventory: pieces the Vault holds and can sell.
• Market Floor: the cheapest piece listed for sale by holders.

The Market Floor and Vault Exit move independently, and neither is a promise. The Vault, explained simply covers each one.

Where the money in a Vault comes from

A Vault fills from the collection’s own activity. A creator sets a mint share, which decides how much of each mint goes to the creator and how much goes to the Vault. It’s fixed for the life of the collection, so a smaller creator share means more for the Vault. And 25% of every royalty on a resale goes to that collection’s Vault (the creator gets 50% and KURV 25%).

A concrete example

A collection mints out, and because the creator kept a modest mint share, part of every mint went to its Vault. Months later, a holder wants out. Instead of waiting for a buyer on the market, they can check the Vault Exit quote and sell their piece to the Vault, if it holds money. The Vault now holds that piece in its inventory and can sell it again. Nobody earned interest; nobody borrowed anything. A piece changed hands with the collection’s own Vault.

Now compare a DeFi pool: you’d deposit coins, other people would trade against them, and your share would move with the pool’s activity and prices. Very different.

Why the distinction matters

• Expectations. A Vault isn’t an investment product. “Every price, return and buyer is up to the market.”
• Risk. Vaults are contracts and contracts can have bugs. They’re also simpler than most DeFi apps, with fewer moving parts.
• Language. If someone describes a Vault as “earning” or “yield”, that’s wrong.

Reading a Vault, step by step

1. Open a collection page on testnet.kurv.fun.
2. Find the Vault numbers.
3. Check whether the Vault holds anything right now.
4. Compare the Vault Exit quote with the Market Floor.
5. Decide on your own, knowing both numbers can change.

Questions to ask about any “earn” offer

If you see a site promising earnings on NFTs or a Vault, ask:

• Where would the money come from?
• Who controls the contract?
• Can I take my coins or pieces out whenever I want?
• Is this the official site, typed in by me?

On KURV the answers are simple: there’s nothing to earn by holding, the Vault fills from the collection’s own mints and royalties, and nobody at KURV can move its backing.

Common mistakes

• Thinking a Vault pays you for holding. It doesn’t.
• Treating Vault Backing as a guaranteed price. It’s funds per piece, not a promise of what you’ll get.
• Assuming every Vault is full. A Vault can hold $0.
• Expecting Vaults to move together. Each collection has its own.
• Mixing up Vault Exit and Market Floor. They’re separate numbers.

FAQ

Is KURV a DeFi app? KURV is a launchpad and marketplace for NFT collections. Each collection’s Vault is one narrow contract.

Can I deposit into a Vault? No. It fills from the part of each mint the creator’s mint share leaves for it, plus its share of royalties.

Can KURV take a Vault’s money? “Nobody at KURV can move a Vault’s backing.”

Does a brought-over collection have a Vault? No. Collections brought from elsewhere on Base trade at their own royalty, with no Vault.

Where to go next

• The KURV glossary