Perps Vault (Counterparty Vault)
The Perps Vault serves as the counterparty to all perpetual futures trades executed on Mars Protocol.
It plays a critical role in ensuring reliable USDC-based settlement, effective risk management, and long-term system sustainability.
Core Function
Unlike traditional perpetual futures platforms that match users against each other (peer-to-peer), Mars Protocol operates a vault-based counterparty model. All trades—long or short—are executed against the Perps Vault, which holds and redistributes USDC for trade settlements.
This design enables:
Deterministic, oracle-based pricing
Simplified trade matching
Efficient PnL settlement
PnL Settlement Mechanics
The Perps Vault is responsible for managing Profit and Loss (PnL) settlement flows between itself and users' Credit Accounts:
Positive PnL (User Profit): The vault pays out USDC to the user's Credit Account when the user closes a profitable position.
Negative PnL (User Loss): Losses are deducted from the user’s Credit Account and transferred to the vault.
If the account does not have enough USDC, the shortfall is automatically borrowed from the Red Bank, Mars Protocol’s decentralized money market.
This mechanism ensures smooth settlement even when accounts are undercollateralized in USDC, maintaining trading continuity.
Deposit Lock-Up Policy
Lock-Up Period: All deposits into the Perps Vault are subject to a 10-day lock-up period.
This measure:
Provides predictable liquidity for settlement needs
Reduces volatility in vault capacity
Protects against sudden liquidity withdrawals that could compromise systemic integrity
Important Note: During the 10-day lock-up period, your funds remain fully exposed to changes in vault share value (i.e., trading performance). While you continue to earn APY during this period, the underlying value may fluctuate based on vault activity. This is not a fixed yield mechanism—APR accrues, but the vault’s performance can impact your actual return.
Revenue Share Participation
The Perps Vault is incentivized to provide liquidity and absorb trade risk through a revenue-sharing model:
It receives a portion of perpetual trading fees collected on the platform.
These fees are denominated in USDC and accrue over time, bolstering the vault’s capital reserves and enabling long-term participation.
This revenue stream also aligns the vault’s sustainability with the health and growth of the Mars Perpetual Futures ecosystem. Perpetuals on Mars charge a 0.075% fee per trade. This fee is split between liquidity providers and the protocol:
75% goes to Perps Vault depositors, rewarding them for providing settlement liquidity.
25% goes to protocol revenue, supporting long-term sustainability and development.
Daily APY
It reflects the daily interest generated from the vault’s accrued trading fees. It varies with platform activity, offering compounded returns to Liquidity Providers (LPs) through the revenue-sharing model.
APY Calculation:
PT = today’s average share-price
PT−30 = average share-price 30 days ago
Summary
Role
Acts as counterparty to all Perp trades
Settlement Asset
USDC
Positive PnL
Paid from vault to user's Credit Account
Negative PnL
Collected from user or borrowed from Red Bank
Deposit Lock-Up
10-day period
Fee Revenue
Receives share of 0.075% trading fee per trade
The Perps Vault is a cornerstone of Mars Protocol’s Perpetual Futures system, enabling non-custodial, oracle-priced, and capital-efficient trading with robust liquidity and settlement guarantees.
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