dYdX POL MM Vault

Summary

Ticker: dYdXPOL Primary liquidity venue(s): dYdX Hedging venue(s): Lighter, Defx Borrowing venue(s): Aave Underlying product(s): Aave USDC borrowing, two sided market making on dYdX, hedge overlays Base asset: POL Vault type: Collateralised active market making vault

Short description

A tokenised vault for POL that provides active two-sided liquidity on dYdX, giving depositors automated access to market making returns in a single composable asset with professional inventory risk management and active hedging.

Description

dYdXPOL wraps Axtior’s active POL market making strategy into a single ERC-20. The vault deploys POL (and, where appropriate, USDC working capital) to quote two-sided markets on dYdX.

The strategy may hold inventory risk as part of normal market making. To keep risk within a defined envelope, Axtior may actively hedge exposures on Lighter and Defx.

Where supported and if enabled for this strategy, the vault may also supply POL as collateral on Aave to borrow USDC as working capital, within a conservative risk framework.

Because dYdXPOL is a standard ERC-20, it can be transferred, used as collateral (where supported), or integrated across DeFi while continuing to track the performance of the vault’s active MM strategy.

1. How the Vault Works

1.1 Deposits and Shares

• You deposit POL into the dYdX POL MM Vault.

• The vault mints dYdXPOL to your address.

• The number of dYdXPOL you receive represents your pro-rata claim on the vault’s assets and PnL.

• Over time, the value of 1 dYdXPOL (in POL terms) floats based on the net performance of the active MM strategy (after vault fees).

1.2 Collateralisation & USDC Borrowing

If POL is supported as collateral and borrowing is enabled for this strategy:

• The vault may supply POL into Aave as collateral.

• It may borrow USDC against that collateral within a predefined risk envelope.

• Borrowed USDC becomes working capital for POL/USDC (and related) markets and hedging.

• The curator may adjust borrow utilisation and maintain buffers to manage collateral health.

1.3 Active Two-Sided Market Making

The vault deploys capital to support two-sided quoting in POL markets on dYdX.

The strategy may adjust:

• Quote width and depth

• Inventory targets

• Participation in any dYdX maker or incentive programs

Primary return drivers typically include:

• Spread capture

• Maker rebates (if applicable)

• Venue incentives (if active)

1.4 Hedging & Inventory Management

To manage POL and base-asset inventory risk, Axtior may hedge on:

• Lighter

• Defx

Hedge usage depends on market regime, liquidity, and inventory profile.

1.5 Rebalancing & Risk Controls

Axtior monitors:

• Inventory skew and turnover

• Fill quality and adverse selection

• Volatility and regime shifts in POL markets

• dYdX uptime, liquidity, and operational risk

• Hedge efficiency and basis risk

• (If borrowing is used) collateral health and borrow costs

Within the defined risk envelope, the curator may:

• Reduce or pause quoting on dYdX

• Tighten risk limits in high volatility

• Adjust borrowing (if used) and maintain safety buffers

• Maintain liquidity buffers where applicable

2. Yield Model

The vault’s return profile is driven primarily by:

• Market making PnL: net spread capture after execution costs

• Rebates & incentives: where dYdX offers maker or liquidity programs for POL markets

• Risk management quality: inventory and hedge efficiency

The dYdXPOL share price reflects net performance after:

• Execution costs and dYdX venue mechanics

• Hedging impacts

• (If borrowing is used) borrow costs and collateral management effects

• Strategy-level fees defined for the vault

3. Who Is This Vault For?

This vault is designed for:

• POL holders who want POL-denominated exposure to active MM returns on dYdX in a single ERC-20.

• DAOs and treasuries with POL on their balance sheet who want professionally managed trading yield.

• Integrators building POL-native structured products referencing active orderbook strategies.

You should be comfortable with:

• Inventory-driven drawdowns in POL and the base asset

• dYdX venue and operational risks

• The curator’s discretionary execution, hedging, and (if enabled) borrowing decisions

• The possibility of negative periods of performance

4. How to Interact

4.1 Depositing

• Choose the dYdX POL MM Vault in the interface.

• Approve the vault to spend your POL.

• Deposit POL and receive dYdXPOL.

4.2 Holding & Using dYdXPOL

While you hold dYdXPOL:

• Your exposure tracks Axtior’s actively managed POL MM strategy on dYdX.

• You can transfer dYdXPOL, use it as collateral where supported, or integrate it into other DeFi strategies.

4.3 Redeeming

• Initiate redemption of dYdXPOL for POL.

• The vault reduces pro-rata MM and hedge exposure as needed and, if applicable, repays any outstanding borrow (subject to venue mechanics).

• You receive POL based on your share of the vault assets at that point in time.