Introducing Market Maker Vaults
Drift Protocol Launches a One-Click Solution for Market Making, Powered by Circuit.
Traditionally, orderbook market making has been an inaccessible aspect of trading, reserved for HFT trading firms with complex infrastructure and in-depth trading algorithms.
Drift Protocol's integrated Market Maker Vaults are changing the narrative by enabling anybody to take part in providing liquidity to orderbooks without needing to set up any infrastructure or having market-making experience.
One Click Market Making
The new Market Maker Vaults automate a professional market making strategy for depositors. Users can deposit into each Market Maker Vault, where each Vault will pool depositor capital together to provide bid and ask quotes on Drift’s orderbooks.
This initiative is part of a bigger mission to grow liquidity within Drift, where Drift welcomes any liquidity providers and stakers to easily deposit into Vaults.
While Drift’s Liquidity Provider (DLP) product will continue to be live, it is important to note that DLP is only suitable for more advanced users who are able to actively manage their own positions.
Market Maker Vaults are a solution designed for depositors who want their MM positions automatically hedged on behalf of them — meaning that users do not need to worry about managing their DLP risks. From automatically running MM algorithms to hedging any delta risk, Circuit Vaults manage exposure on behalf of the user.
Performance Highlights
The Market Maker Vaults are designed to maximize returns while minimizing risk exposure. With over $12M in TVL and a cumulative $1.4M in P&L, Circuit is proud to continuously achieve outstanding APY returns in its current strategies.
The Supercharger Vault, focusing on trading SOL has achieved a cumulative P&L of $1.1M and currently has almost 110% APY, all in less than 4 months. This Vault employs a delta-neutral market making and liquidity provision strategy, on Drift perpetual swaps on Solana.
The Turbocharger Vault multiplies your yield with MM strategies focused on SOL, BTC, and ETH and has attracted over $5M in TVL and an outstanding 200% APY.
The new Vaults powered by Circuit achieve low volatility through a combination of algorithmic hedging and a delta-neutral MM strategy. This strategy is designed to hedge against price fluctuations of the underlying assets and to generate returns that are uncorrelated to overall market performance.
Circuit Vaults will charge a 30% performance fee on performance generated.
Transparency at the Forefront
Circuit Vaults are non-custodial, meaning users always retain full control over their funds. This is achieved by Drift’s Delegate Function — vault managers only have the authority to place or cancel orders and are restricted from withdrawing any assets. This innovation helps to prevent security issues with traditional models of undercollateralized lending.
Prioritizing security, Circuit Vaults have been audited by Ottersec and Drift Protocol has been audited by Trail of Bits and Ottersec.
Get Started
Drift has always been a proponent of smooth UX for users. As such, the first vaults available will be in USDC with no minimal deposit amount.
To ensure stability, there is a short 14-day cooling period for each strategy, users can request to withdraw their funds and any P&L from the account at any time, minus the accrued 30% performance fee.
The integration of Market Maker Vaults is a big step towards solving a pivotal user problem: the complexity of running market-making strategies.
For more details on the Market Maker Vaults, visit Circuit’s documentation portal.
Ready to deposit? View Market Maker Vaults
Disclaimers
The Vault product is provided directly and managed by Circuit Trade. All deposit and withdrawal activities are only accessible through Circuit Trade’s interface. Any figures or numerical statements expressed on this interface such as total earnings, return or annual percentage yield are for estimation and informational purposes only and is not guaranteed. Users should consult with qualified professionals before making a decision to use this interface. Your use of the interface is subject to market risk and may result in a negative return. While we make every effort to ensure the interface is up to date, we do not guarantee the accuracy, completeness or currency of the information on this interface. Users are expected to exercise due diligence and verify information independently.
