Vaults are the way depositors participate in trading strategies on Intention without actively managing positions. There are two kinds:
- Protocol Vault (Liquidity Provider Vault) — the protocol-owned vault that provides base liquidity and absorbs liquidations. 100% of profits go to depositors.
- User-Created Vaults — community-run strategy vaults where a vault leader makes trading decisions on behalf of depositors in exchange for a 10% performance fee.
Quick comparison
| Protocol Vault | User-Created Vault |
|---|
| Managed by | The Intention protocol | A community trader (leader) |
| Profit share to leader | 0% | 10% |
| Creation requirement | N/A | 100 USDC creation fee + 100 USDC initial deposit |
| Leader skin-in-the-game | N/A | Leader must hold at least 5% of vault value |
| Deposit lockup | 4 days | 1 day |
| Yield model | Auto-compounding | Settled on withdrawal |
Protocol Vault
The Protocol Vault is the protocol’s official liquidity backbone. It runs a combination of market-making and taker strategies against a fair-price signal derived from multiple external venues, and it is the counterparty of last resort during liquidations. Its positions, resting orders, and trade history are all on-chain and continuously auditable.
What it does
- Market making. Quotes both sides of the book around the fair price, earning spread.
- Taker strategy. When the local book diverges from fair price, the vault hits the mispriced side to collect the spread.
- Liquidation takeover. When a user is liquidated, the vault takes over the position at the bankruptcy price and profits if it can unwind better. All liquidation profit accrues to depositors.
- Fee subsidy. A share of platform trading fees is routed directly to the vault as part of its income.
Deposits and withdrawals
Users deposit USDC and receive shares proportional to their deposit. Shares are auto-compounding — no claim transactions required.
- Lockup. 4 days from each most-recent deposit.
- Withdraw limits. A daily maximum withdrawal share plus a minimum liquidity ratio (
withdrawable_balance / vault_TVL > 10%). If a withdrawal would breach either, it is rejected and ops is alerted.
- Sharded collection. Because the vault is sharded across addresses, withdrawals are collected deterministically from shards with the highest withdrawable balance, maintaining the liquidity ratio on each.
User-Created Vaults
Any trader who has met minimum activity requirements can create a vault and start managing community capital. The leader trades from the vault’s balance using Intention’s normal trading interface. All trades are on-chain and visible to depositors.
Leader economics and creation
- 10% profit share. Every profitable settlement sends 10% to the leader; 90% to depositors pro rata.
- Skin in the game. Leaders must hold at least 5% of vault value. Below 5%, new deposits from others are blocked until they top up.
- Floor. Leaders cannot withdraw if doing so would leave under 100 USDC in the vault.
Creating a vault requires 100,000 USDC of parent-account trading volume, a non-refundable 100 USDC creation fee, and a 100 USDC minimum initial deposit. Name and strategy description are permanent.
Depositor experience
Depositors browse vaults, review the leader’s history, and deposit USDC. The system computes their share and starts a 1-day lockup. On withdrawal, if margin permits, the vault pays out without touching open positions; otherwise it scales positions down proportionally. The leader can close the vault once all positions are flat; after closure, depositors claim their share.
Safety and transparency
All vault types expose live data via API: TVL, PnL, drawdown, positions, and resting orders. Any user can audit the full history on-chain. The risk system monitors vault margin in real time and alerts operators before any vault approaches liquidation.
Vault performance is not guaranteed. User-Created Vaults in particular depend entirely on the leader’s skill and discipline — a poorly run vault can lose principal like any trading strategy. Review historical performance, position concentration, and the leader’s skin in the game before depositing.
