MegaVault is a user-facing feature which enables users of dYdX* deposit USDC, provide liquidity to various markets and possibly earn yield. The deposited USDC is used to run automated market-making strategies across dYdX markets. With flexible deposits and withdrawals, scalable liquidity solutions, and governance-driven management, MegaVault is an efficient option for both users and markets.

MegaVault uses an automated market making strategy to provide liquidity to high risk, illiquid and volatile markets, and accordingly there is material risk of loss. MegaVault’s strategy aims to support protocol liquidity conditions, not maximize trading returns.

*dYdX means the dYdX blockchain protocol

At launch, yield can come from positive PnL on vault positions, funding rate payments, trading fee revenue share, and other protocol incentives, subject to performance of the vault strategies.

Certain parameters, such as what portion of trading fee revenue to share with MegaVault, can be configured by the governance community for the deployment of dYdX software.

Yes. The MegaVault software was created to provide liquidity and not to maximize yield or profits, MegaVault may take unprofitable positions to support liquidity. MegaVault does not guarantee positive yield, as it depends on many factors including market conditions, vault positions, etc. For example, if the vault has a long position in a particular market and that market’s price drops, then the vault’s net equity decreases. In this example, the depositor’s percent ownership of the vault remains the same, but the value of the ownership decreases.

The APR reflects past 30 day performance, and is not an indicator of future performance. This is because the performance of the MegaVault depends on many factors that are outside of the protocol’s control. Any APR shown is an estimate based on recent performance, and will fluctuate over time. MegaVault has no investment track record and any historical performance is not indicative of future performance, or actual results.

The APR shown on the UI is calculated by taking MegaVault’s total yield over the past 30 days (or lesser period if 30 day data is not available) and multiplying it by 365/30 to obtain the yearly return. In the initial month of the MegaVault, for example, the APR will reflect yield during the few days the MegaVault has been operational, extrapolated to the next 12 months.

MegaVault yield can come from various places (e.g. positive PnL on vault positions, funding rate payments, trading fee revenue share, and other protocol incentives). MegaVault may take positions in sub-vaults that are making losses. MegaVault APR may be positive notwithstanding trading losses as the losses may have been offset by other revenue sources. In cases where sub-vault losses have been offset by other revenue sources, increases in MegaVault TVL will likely lead to reductions in APR.

Any APR shown is an estimate and provided for informational purposes only and could vary significantly. MegaVault has no investment track record, and any historical performance is not indicative of future performance, or actual results.

There are no restrictions on withdrawals except for when launching a new market. When a user launches a market, they must deposit 10,000 USDC into the MegaVault, which is then locked for 30 days. After 30 days, the locked deposit can be withdrawn. Other than restrictions related to new markets, deposits may be withdrawn subject to slippage that may occur (discussed below). Read more about instant market listings here.

When withdrawing from MegaVault, “slippage” (difference between what you expect to receive and what you actually receive) can occur due to increased leverage from collateral outflows.

Deposits are taken from your cross-margined subaccount. Thus, when you make a deposit while having any cross-positions open, your cross margin usage will increase.

You. When you deposit assets to MegaVault, you deposit assets into a wallet address. The private key associated with your wallet address is the only private key that can withdraw your assets from the MegaVault wallet address.

No. If you reside in, are located in, or have a registered office in the United States, Canada, or any other prohibited jurisdiction, you may not deposit in MegaVault.

Yes, there is an endless number of shares of MegaVault, and each additional share issued will dilute the portion of fee revenue and PnL attributed to each share.

MegaVault keeps track of the proportion of MegaVault held by each user. Below is an example of how MegaVault does this.

Event #1: MegaVault has a total of 0 and Alice deposits $90

Results After #1:

Event #2: Bob deposits $10

Results After #2:

Event #3: MegaVault receives $10 from protocol revenue share

Results After #3:

Event #4: A sub-vault’s equity decreases by $20

Results After #4:

Event #5: Carl deposits $10

Results After #5:

Disclaimer and Terms

This document may provide information with respect to the dYdX Chain software, and/or non-mandatory guidelines and suggestions that may help with using dYdX Chain software. dYdX Operations Services Ltd. does not run dYdX Chain validators nor operate or control the dYdX Chain network. dYdX Operations Services Ltd. is not responsible for any actions taken by other third parties who use dYdX Chain software. dYdX Operations Services Ltd. services and products are not available to persons or entities who reside in, are located in, are incorporated in, or have registered offices in the United States or Canada, or Restricted Persons (as defined in the Terms of Use). The content provided herein does not constitute, and should not be considered, or relied upon as, financial advice, legal advice, tax advice, investment advice or advice of any other nature, and you agree that you are responsible to conduct independent research, perform due diligence and engage a professional advisor prior to taking any financial, tax, legal or investment action related to the foregoing content. The information contained herein, and any use of products or services provided by dYdX Operations Services Ltd., are subject to the Terms of Use.