Typical Perps Vault Mechanics
Depositing:
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Add supported assets to supply (often stablecoins or blue-chip tokens)
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Once the transaction is confirmed you will receive vault shares representing your portion of the pool
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Your deposit becomes part of the liquidity backing leveraged trades
Earning:
- Trading fees from perp traders accumulate in the vault
- Funding rate payments flow to the vault
- Liquidation penalties may be distributed to vault holders
- Emissions might be directed to perp vault stakers via voting
Risk Factors:
- Trader profit comes from vault assets (vault takes the other side)
- Large winning trades can reduce vault value temporarily
- Vault acts as a counter-party to all perpetual positions
- Risk is diversified across many simultaneous trades