Designing conservative art-backed vaults

When we set out to design Fluxor's vault system, we made a fundamental choice: safety over growth. This might seem counterintuitive in a space often driven by aggressive yield targets and rapid scaling, but we believe it's the only responsible path forward.

Art is different from most collateral types. Its value is subjective, liquidity is limited, and price discovery is imperfect. These characteristics demand a more conservative approach than you'd apply to, say, blue-chip equities or real estate.

Our vault design starts with conservative loan-to-value (LTV) ratios. Where other protocols might offer 50-70% LTV on collateral, we start much lower. This provides significant buffer against volatility and ensures that even in stressed market conditions, positions remain healthy.

We also implement strict vault caps. Each vault has a maximum capacity, and we don't chase scale at the expense of stability. When a vault approaches capacity, we don't just expand it—we evaluate, test, and only then consider controlled growth.

The staged rollout principle applies to everything we build. New features, new asset types, new capacity—all follow a careful process of validation before wider release. We'd rather move slowly and get it right than move fast and put user assets at risk.

Target yields reflect this conservative stance. When we say 4-8% range, that's not a promise—it's an illustrative range based on conservative strategies. Real returns will vary, and we're transparent about that from the start.

This approach won't appeal to everyone. If you're looking for aggressive yields or maximum leverage, Fluxor isn't for you. But if you value safety, transparency, and responsible design, we think you'll appreciate what we're building.