FAQ
JLP Navigator Vault
What is the JLP Navigator Vault?
The JLP Navigator Vault is a high-yield, delta-neutral investment strategy designed to optimize returns by leveraging and hedging JLP (Jupiter Liquidity Pool) while managing risks. It provides an automated, low-risk way to earn passive income on Solana.
How Safe Is the JLP Navigator Vault?
The safety of the vault is a top priority. For our JLP Navigator Vault, we utilize the Drift Vault framework developed by the Drift team, ensuring a robust and secure foundation.
Limited Permissions: Our system is granted trading rights only, with no access to user funds or withdrawal permissions. Additionally, we cannot modify key parameters, so users retain full control over their withdrawals.
Unaltered Framework: We use the Drift Vault exactly as designed, without modifying any settings or code. If any changes had been made, Drift's Vaults index page would display a warning, ensuring complete transparency.
What Are the Smart Contract Risks Associated with Vectis?
Vectis does not develop or deploy its own smart contracts for the JLP Navigator Vault. Instead, we operate entirely on top of Drift's well-audited and trusted smart contract framework.
By relying solely on Drift's infrastructure, we leverage their robust security measures and proven track record, minimizing the risks typically associated with new or untested smart contracts. All trading and fund management processes are executed within the Drift Vault ecosystem, ensuring a high standard of safety for our users.
What's the difference between Vault A & Vault B, why is the performance differs?
Both Vaults applied the same logic and mechanism. While the Vault mechanisms are consistent, performance may vary slightly due to entry timing and market conditions during different periods
How does the Vault generate returns?
The Vault earns yield through:
JLP Rewards: Generated by providing liquidity to Jupiter's liquidity pools.
Funding Rates: By hedging exposure through Drift Protocol, the Vault captures additional funding rate returns.
Leverage: Optimized borrowing and hedging increase returns without increasing market risk.
Is this strategy delta-neutral?
Yes, the Vault actively hedges market risk by maintaining delta-neutral positions. This means price fluctuations in underlying assets like BTC, ETH, and SOL have minimal impact on your returns.
Is the Trader's PnL from Jupiter Hedged?
Yes, the Vault continuously rebalances and hedges based on the long/short ratio of traders. This ensures that all traders' PnL is fully hedged, maintaining a delta-neutral position at all times.
What Are the Key Differences Between the Vectis Vault and Similar Vaults?
Our vault stands out due to several optimizations and strategic advancements:
Optimized Infrastructure: We've refined critical technical aspects such as RPC selection and failover handling. This ensures more stable loan balancing and minimizes disruptions, leading to smoother operations compared to similar platforms.
Dynamic Leverage Mechanism: Our strategy incorporates a dynamic leverage mechanism that adjusts based on real-time market conditions, such as JLP price premium, USDC borrowing costs and market liquidity etc. By capitalizing on these opportunities while maintaining delta-neutral positioning, we enhance performance and maximize returns for our users.
Cost-Efficient Hedging Execution: During hedging adjustments, we optimize key parameters for order placement on the Drift platform. By fine-tuning settings like auction duration and starting price offset, we leverage their advanced order flow capabilities to minimize costs and improve efficiency in hedging operations.
These improvements result in significantly better outcomes, as demonstrated by our vault's performance compared to others in the market.
Does Leveraging Significantly Increased Risk in the Vault?
No, leveraging does not significantly increase the risk in the JLP Navigator Vault because the strategy remains delta-neutral.
This means that for every leveraged position we take in the JLP, we open corresponding hedging positions on Drift. These hedges offset the directional risk of price changes in the underlying assets (e.g., SOL, ETH, BTC). For instance, if we hold a long position in the JLP that is exposed to SOL, we simultaneously short SOL on Drift to neutralize price volatility.
Moreover, our monitoring system recalculates and rebalances the delta exposure at regular intervals to maintain neutrality. This ensures that even with leverage, the vault is protected against market swings, enabling consistent performance with minimal directional risk.
How does the dynamic leverage mechanism work?
The Vault adjusts leverage based on three factors:
Stablecoin Borrowing Cost: In extreme market conditions where borrowing costs exceed JLP returns, the Vault deleverages to minimize losses.
JLP Premium: When the JLP premium (difference between market price and intrinsic value) is high, the Vault captures the premium by reducing leverage. It then increases leverage again as the premium normalizes.
Closely track on the trading activities on Jupiter for adjusting different parameters
Can I monitor the performance of the Vault?
Yes, users can track key metrics such as Share Price, ROI, Total Fees Paid, and Expected APY directly on our platform. To ensure full transparency, we also offer detailed performance data available for download in CSV format.
For even greater insight, users can subscribe to our vault-specific Telegram channel to stay updated on activities in real-time. Additionally, you can visit the Drift platform webpage to independently verify our trading and hedging activities.
What is Vectis Prime?
Vectis Prime is our premium offering designed to deliver tailored solutions for users with unique requirements. Beyond exceptional strategy performance and the comprehensive tools available on our platform, Vectis Prime provides customizable features to meet individual needs, including:
Flexible Redemption Options: While our standard one-day redemption period already offers excellent convenience, Vectis Prime takes it a step further by providing near-instant access to funds for users who require even greater flexibility.
Exclusive Monitoring Tools: Gain access to private channels and personalized dashboards for real-time tracking and enhanced oversight.
Customizable Parameters: Adjust specific vault parameters to better align with your personal preferences or investment goals.
And More: Our team is ready to accommodate additional customization requests to ensure your experience is perfectly tailored to your needs
dSOL Anchor Vault
What is dSOL Anchor Vault?
The dSOL Anchor Vault is a yield-optimization strategy designed to maximize returns on your SOL holdings. By leveraging dSOL, a Solana Liquid Staking Token, and funding rate opportunities on Drift, the vault generates yield while maintaining the depositor’s original SOL exposure without adding price risks.
How Safe is the dSOL Anchor Vault?
The vault employs robust risk management strategies, including dynamic leverage and hedging mechanisms, to mitigate potential risks. However, like all DeFi strategies, it carries risks such as smart contract vulnerabilities, market volatility, and platform-specific risks. Vectis partners only with reputable and audited protocols to enhance security.
What are the Smart Contract Risks Associated with Vectis?
Smart contract risks are inherent to all DeFi platforms. These risks include potential bugs or vulnerabilities in the protocols we integrate with, such as Drift and Jupiter. To reduce these risks, Vectis uses protocols that have undergone extensive audits and community scrutiny, but complete immunity from smart contract risks cannot be guaranteed.
How does the Vault generate return?
The dSOL Anchor Vault generates returns by:
Earning staking rewards on deposited SOL through dSOL.
Capturing funding rate profits from short positions on Drift.
Dynamically leveraging dSOL to optimize yields while minimizing costs.
These streams combine to provide stable returns to depositors without additional SOL price exposure.
Is this strategy delta-neutral?
No, the dSOL Anchor Vault is not strictly delta-neutral. While the strategy ensures that the user’s original SOL deposit retains its full exposure, the additional dSOL borrowed and leveraged is hedged through short positions. This approach allows the vault to generate additional yield from funding rates and dSOL staking rewards without increasing the depositor’s exposure to SOL price fluctuations.
What is dSOL?
dSOL is a Solana Liquid Staking Token issued by Drift. It represents staked SOL while providing additional utility such as higher Loan-to-Value (LTV) ratios, making it ideal for yield optimization and leveraged strategies.
Why are we using dSOL but not other LSTs with higher yield?
dSOL offers unique advantages such as superior LTV ratios on Drift, enabling more effective leveraging and hedging. Its integration with Drift also enhances funding rate opportunities, which contributes significantly to the vault’s overall yield.
What are the key difference between Vectis Anchor Vault and other vaults?
The Vectis Anchor Vault distinguishes itself through:
Delta-hedged design on the borrowings, while maintaining SOL exposure at the depositor’s initial level.
Dynamic leverage mechanisms to optimize returns while minimizing borrowing costs.
Integration with dSOL for higher yield potential and funding rate profitability.
Leveraging Drift’s FUEL points system, which may convert into rewards for active users.
Does Leveraging increase the price risk of holders?
No, the leveraging mechanism in the dSOL Anchor Vault does not increase the user's SOL exposure. The original SOL deposit maintains its full exposure, while the additional borrowed dSOL is fully hedged through short positions. This ensures that the user's risk remains tied solely to their original deposit, while the leveraged yield generation mechanism works to enhance returns without adding extra price exposure.
How does the dynamic leverage mechanism work?
The vault continuously monitors funding rate profits, dSOL staking yields, and USDC borrowing costs. Based on this data, it adjusts leverage by borrowing more or deleveraging to optimize returns while ensuring the strategy remains cost-effective and net positive for yield generation.
Can I monitor the performance of the vault?
Yes, users can track the vault’s performance directly through the Vectis dashboard. Metrics such as yield, funding rate profits, dSOL rewards, and overall returns are updated in real time, ensuring transparency for all depositors.
LST Compass Vault
1. What is the LST Compass Vault?
The LST Compass Vault is a yield-enhancing strategy designed for USDC depositors. It leverages SOL Liquid Staking Tokens (LSTs) to generate returns while maintaining zero exposure to SOL price fluctuations. By hedging against the entire SOL position, the vault combines LST staking rewards and funding rates to deliver optimized yields.
2. How does the LST Compass Vault generate yield?
The strategy swaps deposited USDC into a basket of SOL LSTs, which earn staking rewards. These LSTs are then used as collateral to borrow USDC, which is swapped back into LSTs and redeposited. Simultaneously, the strategy opens short positions on SOL to hedge against SOL price exposure, capturing funding rates and staking rewards while offsetting borrowing costs.
3. Is this strategy delta-neutral?
Yes, the LST Compass Vault is designed to be delta-neutral. By hedging against the entire SOL exposure—including the USDC deposit converted into LSTs—it ensures that depositors remain unaffected by SOL price movements while maximizing yield.
4. Why does the vault use a basket of SOL LSTs?
The LST Compass Vault employs a diversified basket of SOL LSTs to optimize yields and reduce risks associated with a single token. Currently, the basket includes dSOL, INF and jitoSOL. The portfolio will expand to include additional LSTs in the future, further enhancing diversification and performance.
5. What are the fees for using the LST Compass Vault?
A 25% performance fee is charged on profits generated by the strategy. This fee is applied only when a depositor initiates a withdrawal-related action, such as depositing, requesting a withdrawal, or completing a withdrawal. There are no additional management, deposit, or withdrawal fees.
6. Are there any risks associated with the vault?
While the LST Compass Vault is designed for optimized yield and minimal exposure, risks include:
Smart Contract Risk: Vulnerabilities in the underlying protocols (e.g., Jupiter, Drift) could expose user funds.
Leveraging and Hedging Risks: Rapid market fluctuations in SOL prices, funding rates, or borrowing costs may affect the efficiency of the strategy’s hedging and leveraging mechanisms.
Vectis implements robust monitoring and adjustments to mitigate these risks, but users should be aware of the inherent complexities.
7. How does the dynamic leverage mechanism work?
The vault continuously monitors funding rates, LST yields, and borrowing costs. If funding rates and LST yields exceed borrowing costs by a pre-set margin (e.g., 15%), the vault increases leverage up to 3x to maximize returns. Conversely, if the condition is not met, the vault automatically deleverages to avoid net borrowing costs.
8. Can I monitor the performance of the vault?
Yes, Vectis provides a transparent dashboard displaying the vault’s key metrics, including returns, utilization, leverage levels, and yield breakdowns. This allows depositors to stay informed about the strategy’s performance and adjustments.
9. Why is the vault hedging the entire SOL exposure?
The vault hedges the entire SOL exposure, including the USDC deposits converted into LSTs, to ensure that depositors maintain zero price risk related to SOL. This approach makes the LST Compass Vault an attractive option for USDC holders seeking high yields without exposure to volatile SOL price movements.
10. What are the withdrawal terms?
Withdrawals are subject to a 1-day redemption period. While withdrawal requests can be made at any time, funds will only be available after 24 hours. Profits accrued during the redemption period will not be credited and will be forfeited.
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