Overview
Vaults let you express a worldview in a single token.
Overview
Vaults package a prediction‑market strategy into a single ERC‑20 token (“PPV share”).
Instead of holding individual event markets that expire and can go to $0 or $1, a vault holds a portfolio of positions, can trade in and out before resolution, and rolls into new markets as old ones settle. The result is a token with a continuous NAV / PPS time series that can be traded on secondary markets and (where supported) used in DeFi.
What you are buying
A PPV token is a share of a vault.
The vault holds collateral (currently USDC.e on Polygon) and a portfolio of prediction‑market positions.
The vault’s value is tracked as NAV (net asset value).
The PPV token’s accounting price is PPS (price per share): PPS = NAV ÷ total shares
Vaults are implemented as a fork and extension of Boring Vaults, preserving the share‑based accounting model (NAV/PPS) and extending it for prediction markets (roll cycles, thin orderbooks, and redemption handling).
How vaults fit into the prediction market stack
Vault categories
Vaults are grouped by the thesis they express. Typical categories:
Politics Elections, legislation, geopolitical outcomes, policy direction.
Macro Inflation, rates, recession risk, central bank actions, growth regimes.
Tail risk Low-probability, high-impact scenarios; often convex payoff profiles.
Culture / tech adoption Regulatory moves, social shifts, adoption outcomes, narrative-driven events.
A vault can span multiple categories if the strategy is designed that way.
Strategy types
Vaults differ mainly by how decisions are made and how returns are generated.
Discretionary (human-managed)
A manager decides what to hold and when to change it.
Can take profits or cut risk before resolution when information changes.
Systematic / algorithmic
Rules-based strategies (sizing, rebalancing, hedging, rotation) implemented as code or strict playbooks.
Useful for repeatable approaches (baskets, hedged spreads, regime rules).
Bot / agent / AI-operated
Strategy decisions and execution can be run programmatically.
Typical advantages: speed, continuous monitoring, automation of execution logic.
Still evaluated the same way as any vault: performance, risk, liquidity, and execution quality.
Market-making / liquidity strategies
Designed to earn from spreads and re-pricing inefficiencies rather than “being right” on a single outcome.
Usually higher turnover; returns depend heavily on execution and inventory/risk control.
Incentive / airdrop farming vaults
Some strategies may target non-price incentives (e.g., rewards tied to trading activity or liquidity).
Airdrop/incentive vaults generally:
maintain required activity patterns (volume, participation, liquidity),
manage market risk while meeting those constraints,
treat rewards as part of vault value (reflected in NAV/PPS when realized).
Why tokenization matters here
A single prediction market position has a simple payoff, but it is not a durable asset:
it expires,
it resolves to 0 or 1,
its risk is dominated by a single event.
A vault changes the shape of the underlying exposure:
Portfolio instead of single bet: risk is distributed across many markets.
Perpetual exposure: resolved markets are replaced by new ones.
Continuous price process: PPS evolves over time, rather than a one-time binary payout.
This creates a common “price series” (PPS) that can be used for:
portfolio-level risk measurement (volatility, drawdowns),
comparing strategies on a consistent basis,
and, where supported, integrating PPVs into DeFi systems that expect an ERC‑20 with a price process.
Pricing and liquidity constraints
Prediction markets often have thin orderbooks. “Paper” marks (mid-price) can be misleading at size.
Vaults therefore use an impact-aware view of valuation for operational decisions:
not just “what is the mid price,”
but “what could be realized if positions had to be unwound now,” accounting for depth.
This matters most for:
withdrawal sizing (how much collateral needs to be freed),
roll checkpoints (mint/burn pricing),
and performance fee checkpoints (HWM).
Primary vs secondary access
You can get exposure in two ways:
Primary flow (mint/redeem via rolls)
Deposits: processed on a 24-hour roll cycle (mint at roll PPS).
Withdrawals: processed in batches; timing is vault-configurable (minimum typically 24 hours, can be longer).
Primary is tied to roll timing and unwind constraints.
Secondary markets (trade PPVs like any ERC‑20)
PPVs can be traded on DEXs/aggregators where liquidity exists. Secondary markets allow:
immediate entry (without waiting for the next deposit roll),
immediate exit (without waiting for withdrawal processing),
and a way to manage risk when redemption timing is longer.
Because primary flows have settlement timing, PPVs can trade at a premium or discount to PPS:
a discount can reflect redemption delay, liquidity expectations, or risk sentiment,
a premium can reflect demand for immediate exposure or expected near-term NAV changes.
How to evaluate a vault
Focus on strategy, risk, and liquidity rather than individual event picks.
1) Track record (what happened)
PPS/NAV history
drawdowns (depth and duration)
consistency across market regimes
realized vs unrealized PnL behavior (if reported)
2) Strategy clarity (what it is)
what markets it trades (and why)
what it is trying to capture (edge source)
when it expects to lose money
whether it can exit/reposition before resolution
3) Risk controls (how it avoids blowing up)
concentration limits (per market / per theme)
hedging approach (if any)
liquidity buffers / cash management
how it behaves under adverse moves
4) Liquidity and mechanics (how you get in/out)
withdrawal timing configuration
how frequently rolls occur
whether a secondary market exists and how deep it is
sensitivity to price impact (thin-book exposure)
5) Execution quality (how it trades)
slippage control methods (limits, staged execution, TWAP-like tools)
handling of illiquid positions
behavior around roll freeze windows and redemption preparation
How vaults differ in practice
Common differentiators that affect both returns and user experience:
Directional vs hedged: pure thesis exposure vs explicit downside control.
High turnover vs low turnover: execution-driven vs long-horizon positioning.
Liquidity-tolerant vs liquidity-sensitive: some strategies accept longer exits; others require faster repositioning.
Resolution-dependent vs trading-driven: some rely on settlement outcomes; others rely on re-pricing before resolution.
Collateral use
PPVs are ERC‑20 tokens, so they are technically compatible with DeFi collateral systems. Whether a PPV can be used as collateral depends on third-party support and risk parameters.
Vaults that are more likely to be considered for collateralization tend to have:
lower volatility and smaller drawdowns,
reliable pricing inputs (including handling of thin orderbooks),
sufficient liquidity for liquidations,
and a longer, stable on-chain track record.
Collateralization typically requires conservative parameters (LTV, liquidation threshold) and robust pricing/oracle assumptions.
Summary
Vaults convert prediction-market exposure into perpetual, portfolio-based ERC‑20 assets (PPVs).
Managers can trade before resolution, hedge, and roll exposure as markets settle.
NAV/PPS provides a common accounting and pricing frame; valuation is designed to account for thin orderbooks via impact-aware inputs.
Roll timing makes secondary markets useful for immediate entry/exit and can create premium/discount dynamics.
A continuous PPS time series is what makes prediction exposure usable for portfolio risk measurement and (where supported) DeFi building blocks such as collateral and structured products.
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