JLP Navigator II Vault
JLP Navigator II is a cutting-edge yield strategy designed for users seeking to maximize JLP’s returns while maintaining robust risk management. As the first vault covered by Vectis’ insurance fund, it offers an additional layer of protection by absorbing unexpected losses beyond a 5% drawdown threshold.
By utilizing hedged short positions on Drift, the vault neutralizes exposure to SOL, ETH, and BTC, ensuring that market fluctuations do not affect depositor returns. This makes JLP Navigator II an ideal choice for risk-averse investors looking for stable, high-yield opportunities.
Key Features
1. Insurance Fund Protection
Vectis introduces an insurance fund to safeguard user deposits, setting a new standard in DeFi risk management.
How It Works:
• If drawdowns exceed 5%, the insurance fund automatically covers the excess loss to protect user capital.
• The fund is actively managed to ensure adequate reserves are available.
• This initiative enhances security and investor confidence by mitigating the risks associated with market volatility.
2. Dynamic Reserve Allocation & Yield Optimization
The vault employs strategic reserve allocation to maximize yield while preserving stability.
• Captures JLP’s inherent yield and profits from price inefficiencies in JLP’s premium/discount cycles.
• Monitors stablecoin APY to capitalize on sudden yield spikes while maintaining liquidity for efficient risk management.
3. Strategic & Adaptive Delta Hedging
A real-time hedging mechanism ensures the strategy remains market neutral while adjusting to trader behavior and market conditions.
• Tracks Jupiter Perpetuals activity: Pool utilization, trader PnL trends, and volatility levels guide dynamic hedge adjustments.
• Rebalances positions to optimize returns: Capturing value when conditions are favorable while minimizing directional exposure.
4. Robust Rebalancing Mechanism
• Delta Rebalancing: Adjusts hedging positions when outstanding delta exceeds 2% of the vault’s net value. Factors like asset holdings, open interest, and fee reserves determine the necessary modifications.
• Time-Based Rebalancing: Every 8 hours, the vault recalculates and rebalances exposure across all assets to maintain delta neutrality, minimizing trading costs and slippage.
Withdrawal Terms & Fees
Redemption Period
• Withdrawals can be requested anytime but are subject to a 1-day redemption period.
• Profits accrued during the redemption window will not be credited and will be forfeited.
Airdrops & Unexpected Returns
• A 20% fee applies to airdrops or unexpected returns.
• The remaining 80% of airdrops (e.g., $JUP, $DRIFT) is claimable based on a time-weighted calculation framework.
Performance Fee
• No management fee—100% of capital works towards generating yield.
• A 25% performance fee is applied only to profits, ensuring alignment between user success and vault incentives.
Risks
While JLP Navigator II is designed for stable, risk-adjusted returns, it carries inherent risks:
Smart Contract Risk – The vault interacts with Jupiter and Drift, both of which employ strong security measures, but vulnerabilities in smart contracts could expose deposits to unforeseen risks.
Hedging Risk – Extreme market volatility may affect hedging precision, particularly with rapid price shifts in SOL, ETH, or BTC. While continuous monitoring minimizes exposure, users should be aware of the complexities involved in dynamic hedging.
Why Choose JLP Navigator II?
✔ First-ever insured vault – Backed by Vectis’ insurance fund for added protection.
✔ Optimized yield strategy – Adaptive hedging and premium trading enhance returns.
✔ Designed for stability – Delta-neutral approach eliminates exposure to price volatility.
For more details, including backtesting results, refer to our whitepaper: https://1798074314-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FtHoaCyK7q5YoYK7yfvQ4%2Fuploads%2FNgsdPe7WShTyOgoXXg8M%2FVectis JLP Navigator Vault - Whitepaper.pdf?alt=media&token=2d922cba-78f5-4800-9e13-c103959f4f58
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