The brave Knights of Jones have stumbled upon a fascinating discovery while traveling through an enchanted swamp. A door, marked with symbols of an ancient bull, emits a soft glow and the faint smell of jonion. What could be inside?
We’re excited to announce a powerful new vault type that provides an innovative way for users to generate yield on some of the most popular asset pairs in DeFi.
Our new Metavaults allow users to provide liquidity while also automagically hedging or slightly levering price action on underlying assets. The vaults use Jones strategies and technology to take the benefits of being a liquidity provider to the next level.
How does this work?
- Jonesies would provide $DPX or $rDPX LP tokens obtained via DEX LPs and deposit those into the Metavault of their choice on Jones’ interface.
- Depositors decide their market sentiment and deposit into the directional vault that best suits their market outlook. (Note: depositors are not restricted to a single vault - you can go into both the bullish & bearish vaults at the same time)
- Instead of the typical vault structure we are familiar with where a deposit or claim window dictates token inflow/outflow, you deposit at any time via an epoch that is one week long.
- That deposit will then begin to be implemented into strategies starting on the next epoch.
- You can also signal an exit at any time and your tokens will be unlocked and claimable at the next epoch. This is the only way to exit to metavault, as we need our options strategies to remain proportional throughout the epoch.
- It is also possible to switch your market sentiment mid-epoch, but these changes will likewise take effect the following epoch.
- The vault automatically directs a portion of the vault yield toward purchasing options that either hedge or lever the vault based on the selected strategy
- Users continue to farm with their positions at their preferred risk level while earning attractive yields. Hedged vaults generate yield on top of the normal Dopex farm yield so that if prices move downward, you will be partially hedged against this move. Levered vaults would work in an opposing fashion. (Note that we are not actually employing leverage that could cause liquidation.)
- Profits from the hedging or levering would be reapplied on a regular basis and reinvested, allowing for a more seamless vault experience without the hassle of needing to claim and LP constantly.
- Sleep soundly at night 🛌 or party all night; as long as you choose to stay in the LP we do the rest and autoroll your position for you. Decide you had a change of heart? Flip your position whenever your sentiment changes and it will change the next epoch (weekly epochs are currently employed by Dopex).
We will be launching DPX-wETH as our first metavault. Once launched, the process of launching support for additional assets becomes a lot faster. We expect to add support for popular pairs but also directional vaults too. Bull/bear ETH and BTC vaults anyone?
The ability for us to add pairs for metavaults is ultimately determined by our ability to use options exchanges to fill orders for the appropriate contracts. Our automated hedging strategies will be managed by our in-house options experts and strategists.
Aside from providing automatic downside protection or upside benefit, we believe these new vaults will provide plenty of value to the broader Dopex ecosystem:
- Safer LP’ing and farming for DPX & rDPX holders
- Reduced impacts from impermanent loss
- Provides 1-click advanced strategies to users of all skill levels
- Attractive opportunity to onboard retail users looking for exposure into the Dopex/Arbitrum ecosystem
- More consistent Dopex liquidity during volatile markets
- More user exposure to SSOV products that might otherwise strictly use the LP function
- Fees driven to Dopex due to increased SSOV usage
- Plutus Chad? More stability and fees = happier Plutus Chad
These vaults are a major win for our communities and we can’t wait to see them go live. Markets have been tough lately but we’re still laser focused on ideating, building, and shipping innovative new tools for our users. Onwards and upwards Jonesies!
Join the Jones DAO community now to stay up to date on our upcoming releases and partnership announcements. We’ll be hosting AMAs, previews, and sharing plenty of alpha: