> ## Documentation Index
> Fetch the complete documentation index at: https://docs.intention.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Vaults

> Vaults let depositors share in liquidity-provision and strategy profits — either the protocol-owned liquidity vault or user-created strategy vaults with a leader.

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](/trading/liquidations). Its positions, resting orders, and trade history are all on-chain and continuously auditable.

### What it does

1. **Market making.** Quotes both sides of the book around the fair price, earning spread.
2. **Taker strategy.** When the local book diverges from fair price, the vault hits the mispriced side to collect the spread.
3. **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.
4. **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.

<Warning>
  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.
</Warning>