⚖️CPMM Automated Vaults
Last updated
Last updated
This vault strategy is most suited for depositors who are looking to earn automated boosted returns on their assets without constant position management or short-term price risks.
Essentially this vault is best for users who believe:
The vault asset(s) will trend upward in the long term.
Returns from swap volume will remain steady over time.
Boosted earnings will outweigh the potential risks of impermanent loss.
This vault is not ideal for users with higher risk-reward profiles.
By creating a liquidity pair between two digital assets, the vault generates returns through discrete buy-sell orders on Injective’s on-chain orderbook in the Exchange Module.
Additionally, depositors can earn extra rewards on their vault positions by staking their LP Tokens via Mito’s Staking section.
Choose a Vault: Users select a CPMM vault based on their investment goals and risk tolerance.
Deposit Assets: Users deposit supported assets (e.g., INJ and USDT) into the chosen vault.
Automated Trading: The vault uses the deposited assets to create a liquidity pair on the Injective orderbook and executes automated buy and sell orders based on its predetermined parameters.
Earn Trading Revenue: Users earn a share of the PnL generated by the vault's trading activity, reflected in the increasing value of their Vault Tokens.
Staking for Rewards: Users can further boost their rewards by staking their LP Tokens in Mito's Staking section.
Withdraw Funds: Users can withdraw their assets and any accrued fees at any time.
Vault fees comes from trading volume of the underlying market. The vault places limit orders on the order book with a configurable spread (from 0.2% - 1%) between lowest sell order and highest buy order, which brings trading revenue to the vault. Moreover, the underlying market has a negative maker fee rebate. In most cases, this allows a 0.01% fee per trade.
Note: Potential fees are not “autocompounded” to the individual position, but will instead be added to overall vault’s value. Then when a user withdraws they can take out their portion of the earned fees through this added value.
Mito smart contract risks or bugs
Impermanent loss when returns do not outweigh the price appreciation/depreciation over time
Consistent lack of volume on the trading pair which may lead to low returns
