# AutoFi Income Vault (afIncome)

High-Yield Income Optimizer

---
config:
  theme: neutral
---
flowchart TB
    subgraph PlasmaVault[afIncome Plasma Vault]
        Vault[ERC-4626 Vault<br/>Base Asset: USDC]
        AM[Access Manager]
        FM[Fee Manager]
    end

    subgraph Fuses[Attached Fuses]
        ERC[SupplyFuseERC4626]
        Bal[BalanceFuseERC4626]
        Swap[SwapFuseUniversal]
    end

    subgraph Positions[Tokenized Income Vehicles]
        FSK[tFSK 35%<br/>BDC Private Credit<br/>18.3% Yield]
        DX[tDX 30%<br/>Mortgage REIT<br/>14.7% Yield]
        PDI[tPDI 20%<br/>Multi-Sector Bonds<br/>14.7% Yield]
        JEPI[tJEPI 15%<br/>Equity Premium<br/>8.5% Yield]
    end

    Alpha[Alpha Bot<br/>IncomeOptimizer]
    Raindex[(Raindex<br/>Orderbook)]
    Oracle[Price Oracle]

    Vault --> Fuses --> Positions
    Swap --> Raindex
    Alpha -->|execute| Vault
    Oracle -->|pricing| Alpha

    Note1[Blended Yield: 15.3%<br/>Monthly Rebalance<br/>Target Return: 10-15%]

# What It Is

afIncome replicates an institutional-grade income portfolio through tokenized versions of four yield vehicles. The vault maintains allocations across Business Development Companies (BDCs), Mortgage REITs, Multi-Sector Bond Funds, and Equity Premium Income strategies, automatically rebalancing monthly.

# How It Works

When you deposit USDC, the vault converts your capital into a weighted basket of four tokenized income vehicles. FSK (FS KKR Capital, 35%) provides floating-rate private credit through senior secured loans to middle-market companies. DX (Dynex Capital, 30%) invests in mortgage-backed securities with leverage, earning income from the spread between MBS yields and borrowing costs. PDI (PIMCO Dynamic Income, 20%) offers diversified exposure to high-yield credit, emerging market debt, and mortgage-backed securities. JEPI (JPMorgan Equity Premium Income, 15%) generates income by selling covered calls against low-volatility S&P 500 stocks. The vault rebalances monthly when any position drifts more than 2% from target, systematically trimming winners and adding to laggards.

# Target Returns

15.3% blended yield (~$1,275 monthly per $100,000 invested), with 10-15% expected total return including 2-4% price appreciation

# Who It’s For

Income-focused investors seeking double-digit yields
Those who want professional-grade income strategies without stock picking
Investors comfortable with credit and rate risk in exchange for high income
Users seeking monthly cash flow generation
Anyone wanting to replicate institutional income portfolios onchain

# Benefits

Institutional Strategy, Retail Access: This portfolio mirrors strategies used by family offices and wealth managers. Tokenization makes it accessible without minimum investments or advisor relationships.

Diversified Income Sources: Four distinct income engines means no single failure point. Private credit, mortgages, global bonds, and equity options each generate income through different mechanisms.

Automatic Discipline: Monthly rebalancing enforces buy-low-sell-high mechanics without emotional interference.

High Monthly Cash Flow: At 15.3% blended yield, a $100,000 investment generates approximately $1,275 per month in income.

# Risk Profile

Medium-High Risk: This is a high-yield strategy that accepts meaningful risks in exchange for elevated income. Credit risk from BDC loan defaults, rate risk from DX's 6x leverage, spread risk affecting PDI and DX valuations, and equity risk from JEPI's capped upside. Not suitable for risk-averse investors, those needing guaranteed principal, or investors uncomfortable with double-digit volatility.

# afIncome rebalancing

---
config:
  theme: neutral
---
sequenceDiagram
    participant Scheduler
    participant Alpha as Alpha Bot
    participant Vault as Plasma Vault
    participant Oracle as Price Oracle
    participant Raindex

    Note over Scheduler: Monthly Rebalance Trigger<br/>(1st of each month)

    Scheduler->>Alpha: initiate monthly rebalance
    
    Alpha->>Vault: get current position balances
    Vault-->>Alpha: tFSK, tDX, tPDI, tJEPI holdings
    
    Alpha->>Oracle: get current prices
    Oracle-->>Alpha: market values for each position
    
    Alpha->>Alpha: calculate current weights
    Note over Alpha: FSK: 38% (target 35%)<br/>DX: 28% (target 30%)<br/>PDI: 19% (target 20%)<br/>JEPI: 15% (target 15%)
    
    Alpha->>Alpha: identify rebalance trades
    Note over Alpha: Sell 3% FSK<br/>Buy 2% DX<br/>Buy 1% PDI

    loop For each trade
        Alpha->>Vault: execute swap via Raindex
        Vault->>Raindex: takeOrder
        Raindex-->>Vault: tokens swapped
    end

    Alpha->>Vault: verify final allocations
    Alpha->>Alpha: log rebalance complete

# afIncome Macro Response Flow

---
config:
  theme: neutral
---
flowchart LR
    subgraph MacroDrivers[Macro Environment]
        Rates[Fed Rate Cuts<br/>3.0-3.4% target]
        Spreads[Credit Spreads<br/>Tightening to 250-300bps]
        Vol[Market Volatility<br/>Elevated uncertainty]
    end

    subgraph PositionBenefits[Position Responses]
        FSK_B[FSK Benefits<br/>Cheaper funding<br/>Wider NIM]
        DX_B[DX Benefits<br/>Lower repo costs<br/>MBS appreciation]
        PDI_B[PDI Benefits<br/>Credit rally<br/>NAV recovery]
        JEPI_B[JEPI Benefits<br/>Premium elevation<br/>Income boost]
    end

    subgraph Outcome[Portfolio Outcome]
        Income[15.3% Yield<br/>Maintained]
        Growth[2-4% Price<br/>Appreciation]
        Total[10-15% Total<br/>Return]
    end

    Rates --> FSK_B
    Rates --> DX_B
    Spreads --> DX_B
    Spreads --> PDI_B
    Vol --> JEPI_B

    FSK_B --> Income
    DX_B --> Income
    PDI_B --> Income
    JEPI_B --> Income

    FSK_B --> Growth
    DX_B --> Growth
    PDI_B --> Growth

    Income --> Total
    Growth --> Total

# afIncome Risk Management

---
config:
  theme: neutral
---
flowchart TB
    subgraph RiskMonitoring[Continuous Risk Monitoring]
        Credit[Credit Quality<br/>Monitor non-accruals]
        Book[Book Value<br/>Track NAV changes]
        Spread[Spread Levels<br/>Watch HY OAS]
        Vol[Volatility<br/>VIX tracking]
    end

    subgraph Thresholds[Alert Thresholds]
        T1[FSK non-accruals > 3%]
        T2[DX book value -10%]
        T3[HY spreads > 400bps]
        T4[VIX spike > 30]
    end

    subgraph Actions[Response Actions]
        Reduce[Reduce affected position]
        Hedge[Increase defensive allocation]
        Rebalance[Emergency rebalance]
        Alert[Notify governance]
    end

    Credit --> T1
    Book --> T2
    Spread --> T3
    Vol --> T4

    T1 --> Reduce
    T2 --> Reduce
    T3 --> Hedge
    T4 --> Rebalance

    Reduce --> Alert
    Hedge --> Alert
    Rebalance --> Alert