wETH Perp Vault

Summary

Ticker: perpETH Underlying venue(s): Aave, Lighter, HyperLiquid, edgeX, Defx Underlying product(s): Aave USDC borrowing, llpUSDC, hlpUSDC, elpUSDT, dlpUSDC Base asset: wETH Vault type: Collateralised multi-venue perp vault

Short description

A tokenised vault for wETH that supplies ETH as collateral to borrow USDC and deploys that USDC across multiple perp DEX LP vaults, giving depositors automated access to LP fees, funding, and incentives from leading perp markets in a single composable asset, with discretionary allocation between venues.

Description

Unlike a single-venue LP wrapper, this vault is discretionary: Axtior actively monitors market structure, LP performance, funding regimes, liquidity conditions, and venue-specific risks. Within a defined risk envelope, we can rotate capital from one LP vault to another, reduce exposure, or pause allocations to optimize risk-adjusted returns and respond to changing market regimes.

perpETH is an ETH-denominated strategy that allows ETH holders to access perp LP yield without selling ETH. The vault uses wETH as collateral to borrow USDC on Aave, then allocates the borrowed USDC into a discretionary basket of perp LP vaults across Lighter, HyperLiquid, edgeX, and Defx.

Because perpETH 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 underlying collateralised multi-venue LP strategy.

1. How the Vault Works

1.1 Deposits and Shares

• You deposit wETH into the wETH Perp Vault.

• The vault mints perpETH to your address.

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

• Over time, the value of 1 perpETH (in ETH terms) floats based on the net performance of the strategy (after vault fees), including the effects of USDC borrowing and underlying LP performance.

1.2 Collateralisation & USDC Borrowing

• The vault supplies wETH into Aave as collateral.

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

• Borrowed USDC becomes the deployable capital for perp LP allocations.

• We may adjust borrow utilization and maintain buffers to manage collateral health.

1.3 Discretionary Routing Across LP Venues

The vault deploys borrowed USDC into a strategy-selected mix of underlying LP vaults, which may include:

• Lighter LLP (via llpUSDC)

• HyperLiquid HLP (via hlpUSDC)

• edgeX eLP (via elpUSDC)

• Defx DLP (via dlpUSDC)

The allocation is not fixed. We may shift weightings as conditions change.

Yield sources across venues typically include:

• Trading fees generated on perp markets

• Net funding captured by LP pools

• Protocol incentives (if active)

• Venue-specific rebates or programs

1.4 Rebalancing & Risk Controls

Axtior monitors, at both venue and portfolio levels:

• LP PnL, drawdowns, and volatility

• Funding and volume dynamics

• Market concentration and risk exposure of each LP pool

• Liquidity conditions and redemption mechanics

• Venue operational, governance, and smart contract risk

• Collateral health and USDC borrow costs on Aave

Within the defined risk envelope, we may:

• Rotate capital between LP vaults to improve risk-adjusted returns

• Reduce or pause exposure to a venue during unfavorable regimes

• Enforce TVL caps per venue

• Maintain diversification thresholds

• Adjust borrowing and maintain safety buffers to manage liquidation risk

• Hold a small USDC buffer for liquidity management (where applicable)

2. Yield Model

The vault’s return profile is driven primarily by:

• LP fees: A share of taker fees paid by perp traders across supported venues.

• Funding: Net funding flows between longs and shorts captured by underlying LP pools.

• Incentives: Any additional token rewards, fee rebates, or promotional programs.

The perpETH share price reflects net performance after:

• Venue-level fees and LP mechanics

• Allocation and rebalancing impacts

• Aave borrow costs and collateral management effects

• Strategy-level fees defined for the vault

• Realised gains or losses from market moves

3. Who Is This Vault For?

This vault is designed for:

• wETH holders who want ETH-denominated exposure to diversified perp LP yield in a single ERC-20.

• DAOs and treasuries seeking managed multi-venue exposure while maintaining ETH balance sheet exposure.

• Integrators building structured products that want a basket-style perp LP index with discretionary risk management and ETH-native denomination.

You should be comfortable with:

• Multi-venue perp protocol risk

• LP drawdowns during adverse market regimes

• Our discretionary decision-making

• Borrowing and collateral risks associated with Aave

• The possibility of negative periods of performance

4. How to Interact

4.1 Depositing

• Choose the wETH Perp Vault in the interface.

• Approve the vault to spend your wETH.

• Deposit wETH and receive perpETH.

4.2 Holding & Using perpETH

While you hold perpETH:

• Your exposure tracks the vault’s actively managed, ETH-collateralised basket of LP positions.

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

4.3 Redeeming

• Initiate redemption of perpETH for wETH.

• The vault unwinds the corresponding pro-rata exposures across underlying LP venues and repays the associated USDC borrow on Aave (subject to venue mechanics).

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