Perennial users can LP through a vault that creates a friendly passive LP experience by abstracting some of the complexities of Perennial's core protocol, allowing for a more seamless experience. Right now, this vault is only available on Arbitrum.
Perennial Vaults act the same as any other Perennial maker position — Vaults directly take the other side of taker positions, leading to delta (directional) exposure.
Note: Perennial LP's still have the option to LP direct into markets (pick and choose markets, customize position parameters, etc.). See Advanced liquidity provisioning for more info.
Among the benefits of Vaults:
- Single endpoint for exposure to multiple markets (unified liqudity)
- Automated liquidity rebalancing
- Partial delta hedging (i.e. exposure on one side of the market is partially netted out by exposure on the other side)
- Lower fees (pooled costs)
Vault creation is permissionless, so any number of vaults can/will be created.
To start, Perennial has 1 vault: This vault is a simple that deploys & rebalances capital between 2 markets (split between Long-ETH & Short-ETH markets). The vault manages collateral (and leverage) & positions between multiple markets. To start, this vault will target an even capital split (50/50 between the two markets). However, the per-market target allocation is a parameter that can be altered over time (for example, to optimize yield if utilization between the markets varries greatly).