🕸️UltraX Arbitrage

Background

Over the past year, we launched a funding rate arbitrage vault spanning Backpack and Drift / Hyperliquid, designed to capture real yield alongside potential TGE points.

At its peak, the vault delivered up to 62.94% 7D APY. However, funding rate inefficiencies are often episodic and venue-constrained, leading to volatile and inconsistent yield performance over time.

These limitations highlighted a clear opportunity to build something more robust, scalable, and adaptive to market dynamics.

This is why the UltraX Arbitrage Vault was born.

Core Strategy Design

1. Arbitrage Trading

The UltraX Vault is designed to capture funding rate and basis arbitrage opportunities across multiple perpetual DEXs, rather than being constrained to a single venue or a fixed exchange pair.

Vectis has spent an extended period developing this vault which could continuously scans multiple exchanges to capture both price dislocations and funding rate spreads across venues, enabling the strategy to systematically exploit inefficiencies that arise in a fragmented on-chain derivatives market.

2. Collateral Rebalancing

Vecits continuously monitor the free collateral and margin health of every exchange account in use. As the UltraX trades perpetual futures, effective collateral management is critical to maintaining system stability and avoiding liquidation risk.

When collateral on any exchange falls below our internal safety threshold, capital is automatically reallocated from other venues with excess buffer. This ensures that positions remain well-collateralized at all times, even during periods of heightened volatility or rapid funding changes.

3. Capital Allocation

Capital is dynamically allocated across exchanges based on opportunity strength and operational requirements, rather than being statically assigned. Allocation decisions consider funding rates, price spreads, liquidity conditions, and collateral needs on each venue.

This dynamic allocation framework allows the vault to remain flexible, maximize capital efficiency, and continuously route funds toward exchanges offering the most attractive risk-adjusted arbitrage opportunities.

Risk Management System

Vectis have built a robust, real-time risk management system that continuously monitors both open positions and equity changes across all integrated exchanges. This system is designed to remain responsive even during periods of extreme market volatility or rapid market drawdowns.

In addition to automated safeguards, our internal monitoring framework actively tracks unexpected exchange-level events, including scenarios such as auto-deleveraging (ADL), abnormal funding behavior, or execution anomalies.

Plus, all assets are secured via Cobo MPC custody, providing robust key management, withdrawal controls, and operational security.

Fees

The UltraX Vault applies the following fees to support ongoing operation and institutional-grade custody:

Performance Fee: 20%, charged only on net profits

Management Fee: 2% annually, based on total assets under management

Withdrawal Fee: 0.3% per withdrawal

Incentives & Airdrop Capture

Perp DEX ecosystems frequently reward active traders and liquidity providers through points programs and airdrops. These incentives often represent a meaningful but underappreciated return component.

UltraX is structured so that 100% of perp DEX airdrop points earned by the vault are distributed to depositors, allocated pro-rata based on both deposit size and time in the vault. This ensures that users, not the strategy operator, fully benefit from ecosystem incentives generated by their capital.

What’s Next

UltraX is currently in Phase 1, focusing on dynamically allocating capital across multiple perpetual DEXs, including Aster, Lighter, Hyperliquid, and Drift. By expanding the opportunity set, the vault remains productive even when arbitrage spreads on any single venue compress.

Backtests indicate ~20% returns, reflecting improved stability, consistency, and capital efficiency compared to single-venue strategies.

Phase 2 will further enhance the strategy by integrating additional pre-TGE venues, such as GRVT and Extended, enabling users to earn sustainable yield while accumulating protocol points.

Phase 2 is planned for February 2026.