> For the complete documentation index, see [llms.txt](https://docs.zipper.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.zipper.trade/vault-architecture.md).
# Vault Architecture
Zipper’s **vault system is designed for efficiency and cost-effectiveness**, ensuring every zAsset remains fully **1:1 backed** while minimizing gas costs across different blockchain networks. Unlike a traditional pooled vault model, Zipper **utilizes a distributed deposit system**, where user deposits are managed across multiple addresses before being consolidated into a **main vault**.
***
### **Deposit Addresses vs. Main Vaults**
Zipper operates with **two distinct types of vault addresses** to manage assets efficiently:
1. **Deposit Addresses** - User-specific addresses used for receiving deposits before consolidation.
2. **Main Vaults** - Primary storage locations where assets are consolidated after deposits.
***
### **How Funds Move in Zipper**
#### **Step 1: Deposits are Sent to Users' Deposit Addresses**
* When a user **zips an asset**, they send it to their **designated deposit address**, which is unique to them.
* These deposit addresses **are not uniquely generated for every deposit**, meaning users deposit to the same assigned address each time if depositing the same asset or on the same network as a previous deposit.
* **Deposit addresses are not shared between users**, ensuring funds remain separate and **avoiding commingling.**
* Although deposit addresses are distinct from the main vault, they are still **secured under the same private key model** as the main vault.
#### **Step 2: Backend Workers Monitor for Optimal Gas Fees**
* Instead of immediately consolidating all deposits into the main vault, **Zipper’s backend infrastructure monitors gas prices on the originating chain.**
* When network conditions are favorable, deposits are **batched and consolidated** into the **main vault** to minimize unnecessary gas costs.
#### **Step 3: Main Vaults Store the Bulk of Zipped Assets**
* Each **supported token** has **one primary vault per blockchain**.
* The **main vault is used for fulfilling unzips**, ensuring **sufficient liquidity is available when users withdraw assets**.
* Even if a token exists in multiple deposit addresses, the total amount across **deposit addresses + main vault = 1:1 backing for all zAssets** on Fabric.
#### **Step 4: Unzipping Assets & Covering Withdrawals**
* When a user **unzips** an asset, Zipper first attempts to **release funds from the main vault**.
* If the main vault does not have enough funds to immediately process the request (before gas-efficient consolidation has occurred), Zipper **automatically fetches the required funds from existing deposit addresses** to fulfill the withdrawal.
* This mechanism ensures **all withdrawals are processed seamlessly, regardless of vault balance distribution at any given time.**
***
### **Key Vault Architecture Takeaways**
✅ **1:1 Backing Across All Addresses** - Assets in deposit addresses and main vaults **collectively ensure every zAsset remains fully backed.**\
✅ **One Main Vault Per Token, Multiple Deposit Addresses** - Each **token has its own dedicated vault**, but deposit addresses can handle multiple tokens from the same blockchain.\
✅ **No Commingling of User Funds** - Deposit addresses are **assigned per user**, ensuring **clear separation of assets** before consolidation.\
✅ **Dynamic Fund Consolidation** - Zipper’s architecture is designed to **minimize gas fees** by batching deposit transfers during **low-fee windows**.\
✅ **Efficient Withdrawal Processing** - If the main vault is temporarily underfunded due to unprocessed consolidations, Zipper **automatically retrieves assets from deposit addresses** to fulfill withdrawals without delay.
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