The diagram above illustrates how vault works in terms of bringing more liquidity to the market. In this case, NFT holders, who deposit their items, will receive Star vault Token. Star vault Token holders can then trade it on the DEX. Such a transaction, in fact, transfers the ownership from the seller to the buyer because the latter with a Star vault Token can redeem an NFT from Startvaults.
NBA Topshot common moments vault is created on Starvaults. The vault creator injects 1000 moments and gets 1000 Star Topshot token paired with 2000 $FUSD on a DEX, with a 5% minting fee set for the vault. A user who wants to liquidate 20 Topshot moments will come to the vault and mint 19 Star Topshot token, 1 token will be sent to the fee smart contract set by the creator. Now he can liquidate it on the DEX instantly with the Star Vault token. He will get, (excluding trading fee) around 39 $FUSD instantly.
In this way, the moments owner does not need to wait for his 20 orders to be fulfilled one by one in the Topshot marketplace and he could sell those immediately to get $FUSD. The liquidity provider has earned trading fees as well as cheaper Topshot moments. The vault owner earned a minting fee.
The price of one moment is determined by the liquidity supplies of the pairs on the DEX, the buying and selling activities on the DEX led by arbitrageurs and market makers.
For example, assume the floor price of a Top Shot on Starvaults is 2 $FUSD (1 $NBATS = 2 $FUSD), and on NFT market price is 2.2 $FUSD, arbitrageurs can buy the the moment from Starvaults, deposit on the marketplace, sell it for 2.2 $FUSD. (achieving a gain of 0.2 $USDC). The swap will cause the supply of $NBATS tokens to go down and $USDC to go up, and will cause the price of $NBATS in terms of $USDC, to increase. Price equilibrium is achieved.