Managed Vaults
Managed Vaults on Mars Protocol are a powerful tool enabling the decentralized deployment of trading strategies via community-managed Credit Accounts.
These vaults allow experienced traders or strategy designers to operate funds on behalf of depositors—while adhering to strict security and operational constraints.
Each Managed Vault is built on a Credit Account, giving the manager access to leverage and trading capabilities without ever being able to directly deposit or withdraw assets, ensuring robust separation of powers and minimizing risk.
Key Features
Managed Vaults are designed to combine capital efficiency, decentralized strategy deployment, and user safety. Core features include:
Vault Manager Access: Managers interact with the Mars trading interface to execute trades and manage leveraged positions via the Credit Account.
No Manager Withdrawals: Managers are restricted from withdrawing from the vault directly. This guarantees that only users control capital outflow.
Fungible LP Shares: Users who deposit into a vault receive fungible vault shares, which represent their proportional claim on the vault’s assets and performance.
Automated Liquidity Handling: If users request withdrawals and the vault lacks sufficient asset (e.g. USDC) liquidity, the system will automatically borrow the asset (e.g. USDC) from the Red Bank to fulfill the request, maintaining usability and minimizing friction.
Vault Parameters
Managed Vaults incorporate configurable parameters to balance flexibility with control:
Performance Fee
Managers can claim fees monthly, aligned with protocol governance standards.
Performance fee rates are adjustable, but only during the monthly withdrawal window to ensure transparency and user trust.
Withdrawal Period
Vaults may enforce a withdrawal lock-up period, designed to protect strategy integrity and manage liquidity effectively.
This period defines how often users may withdraw their funds from the vault.
Vault Management Mechanics
Mars Protocol introduces mechanisms to ensure vaults remain responsive to user actions while preserving strategic autonomy for managers.
Withdrawal Scheduling: The user interface clearly communicates the upcoming withdrawal window, allowing users and managers to plan accordingly.
Asset Liquidity Preparation: Vault managers can proactively prepare asset liquidity before scheduled withdrawals to avoid slippage or forced borrowing.
Automated Borrowing Backup: If a vault is underprepared, Mars will automatically borrow the base asset from the Red Bank to fulfill withdrawals. This ensures withdrawal reliability without compromising the strategy.
Tutorials and How-Tos
To support users and prospective vault managers, Mars Protocol provides comprehensive tutorials:
Creating a Vault A guide for traders or strategy designers on how to configure and launch a vault.
Managing a Vault A guide for traders or strategy designers on how to responsibly manage a vault.
Depositing into Vault Step-by-step instructions for users to evaluate, select, and deposit into a community vault.
Managed Vaults democratize access to advanced DeFi strategies, allowing passive users to benefit from the expertise of experienced traders while maintaining non-custodial control and system-wide transparency.
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