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In the ever-evolving world of DeFi, vaults are shaping the future of on-chain investment management. At Paradex, we’ve taken the concept of crypto vaults to the next level, building on what Ribbon (v1) and HL (v2) started. Paradex Vaults are more than just an upgrade; they represent the future of diversified on-chain investments. Here's why:

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1. Spot, Perps, and Options in a Single Vault

Previous vault versions were limited to single assets and strategies, but Paradex Vaults will change the game. Our vaults combine spot, perpetual futures (perps), and options strategies in one, allowing users to diversify exposure without managing separate vaults or accounts. Plus, Paradex Vaults support multiple collateral types, including BTC, ETH, and USDC, unlocking a new design space for yield generation—something truly groundbreaking in DeFi.

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2. Super Capital Efficient (Portfolio Margin)

Paradex is the first on-chain DEX to offer portfolio margin. With offsetting positions like long BTC and short perp, you'll need significantly less margin, allowing you to trade larger sizes with less capital. This is a game-changer for DeFi, unlocking max leverage across complex portfolios.

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3. Use Vault LP Tokens as Collateral

Every vault depositor receives an LP token representing their share in the vault. Notably, Paradex will launch a delta-neutral vault (long spot, short perp), and the LP token from this vault will be granted synthetic dollar/collateral status, offering a form of native yield.

This allows users to use the synthetic dollar as collateral for trading or to deposit into other vaults directly on the platform. Essentially, Paradex Vaults operate like an on-chain version of Ethena, enabling you to compound yield and trade without moving assets off-platform.

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4. Order Privacy (No Front-Running)

Paradex's off-chain order book ensures Vault and Account orders are fully protected from front-running—an issue that's caused challenges for many vault operators in the past. This improvement tackles a major pain point, even prompting some notable vaults to close due to front-running vulnerabilities.

5. Efficient Withdrawals (No Market Dumping)

We've designed a withdrawal mechanism that prevents your positions from being market-dumped during withdrawal requests. Instead, withdrawals go through a temporary auxiliary account, allowing you to control the pace of your exit. This approach offers two key benefits:

1. Reduced slippage and more control for you

2. Slippage is not unfairly passed onto other vault participants

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6. Configurable Fee Share

While a smaller improvement, Paradex Vault owners can customize their fee share between 0-30%, providing flexibility in managing vault profits.

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Roadmap:

Phase 1: Perps Only – Launched in October
Phase 2: Options with Portfolio Margin – Coming in Nov/Dec
Phase 3: Spot with Multi-Collateral and Auto-Borrow/Lend – Set for Dec/Jan

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Whether you're a seasoned trader or new to the space, Paradex Vaults offer the tools to maximize your yield and expand your on-chain strategy.

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