> For the complete documentation index, see [llms.txt](https://sushi-labs.gitbook.io/kubo-documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sushi-labs.gitbook.io/kubo-documentation/how-kubo-works/stablecoin-vaults.md).

# Stablecoin Vaults

Kubo's Stablecoin Vaults serve as a layer on top of Repo trades. They are convenient for stablecoin farmers who prefer a passive approach to actively monitoring Repo offerings. Stablecoin Vaults are critical to delivering users' exposure the way they want to receive it. 

Stablecoin Vaults hold USDC or USDT and capture delta-neutral Repo trades whenever available to earn delta-neutral yield. Each time a vault takes a Repo trade, it first uses a spot DEX like [SushiSwap](https://www.sushi.com) to convert its stablecoins into the market's underlying token and then funds the delta-neutral Repo. When the Repo returns the spot asset, the vault converts it back to the original stablecoin.