Vaults

What are Vaults?

Vaults are systems of smart contracts that automate liquidity management for LPs.

In regular AMMs, LPs place liquidity across static price ranges and rebalance them as markets move. Vaults automate and streamline this process for LPs by:

  • encoding rebalancing logic directly on-chain, allowing depositors to better respond to changes in market dynamics

  • internalising risk management logic, for example through explicit impermanent loss caps

  • socialising (or even negating) the gas cost of position updates

  • curating the best yield opportunities through community discovery and pool-level governance.

What Vaults are available?

Two types of Vaults are available:

  1. Strategy Vaults (V1): our older, original Vaults, which managed liquidity for LPs by placing and updating liquidity positions in Haiko's AMM as markets move

  2. Solvers (V2): our newest, improved vaults, which introduce zero-cost rebalancing and other features such as impermanent loss caps, private markets and pool-level governance.

We recommend new depositors to use Solvers. The first Solver in production is called the Replicating Solver, which automatically provides liquidity at the imputed oracle price. You can learn about it here.

How are Vaults different from AMM LP positions?

Vault deposits can be thought of as automatically rebalanced liquidity positions that are shared amongst multiple depositors.

A vault will typically collect deposits from depositors and place these across two positions (bid and ask), so that it can quote for both incoming buys and sells. Vault ownership is tracked via a pool token, similar to Uniswap V2 AMM positions.

All vault contracts use a singleton architecture, meaning they can maintain multiple markets / pairs under a single contract.

Rather than placing liquidity across a fixed price range, a vault typically operates on an external oracle price feed and some configurable parameters (e.g. a spread, skew factor) to dynamically place liquidity.

Should I provide liquidity through Vaults or Haiko's AMM?

Haiko LPs have flexibility to provide static, fixed range liquidity through our AMM, or deposit to any of a number of Vault strategies.

Generally speaking, if you:

  • Prefer to more manual control over your positions, use AMM liquidity positions

  • Prefer to benefit from automation and managed positions, use Haiko Vaults

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