TAX ADVANTAGES

Due to how the smart contracts are designed and function, there may be some significant tax implications/savings, depending on your jurisdiction.

Under normal crypto tax circumstances (USA), all trades between cryptocurrencies (a property) and between fiat currency are taxed. Havens have characteristics that differ from standard crypto transactions. 

In Havens, a token represents your asset in a periodically rebalanced portfolio. You do not rebalance assets yourself. Because your vault token is itself a portfolio strategy, the automated underlying activities such as rebalancing are not taxed. 

Normally if you rebalance your portfolio, you buy, sell, and trade in order to have your assets proportioned. This triggers taxes on your investments, and you may also lose out on long term capital gains treatment.

When you use a Haven, you are exchanging one token for another (vault tokens). You have just traded one property for another. This transaction will result in a capital gain or loss.

But once in a Haven, you are taxed on your overall capital gains from the time you initially exchanged—until the time you sold or redeemed the vault tokens. Wait a year or longer, and it’s now a long-term cap gains rate. 

This is similar to how ETFs function. Gains or losses are decided when you sell the ETF shares, regardless of the buying and selling within the actual ETF.

This is why Hodlers ❤️ Havens. Volatility vaults are a long-term accumulation strategy holders can put some of their coins inside to grow their stack, all w/o worrying about the tax burden.