Vaults
Vaults let you earn returns by depositing your assets into an autonomous trading pool while retaining exposure to your assets. To start, we will only allow USD to be deposited but may open up to accept other assets in the future.
Think of a vault like DeFi liquidity pool: you deposit USD, receive BLT (Backpack Liquidity Tokens) — think of it as a receipt token of your deposited assets, each representing your claim on the underlying pool. Your tokens may fluctuate in value based on the value of the overall pool. At any time, you can redeem your BLT for your underlying assets in the pool (subject to a delay, as described below).
The vault operates as an autonomous account on Backpack Exchange — no trader has personal custody of any user assets, and performance is fully transparent.
How It Works
BLT & NAV
When you deposit USD, you receive BLT representing receipt of your deposited assets. The price of each token is determined by the vault’s NAV (Net Asset Value) — the total value of everything in the vault divided by the number of tokens outstanding.
When the pool profits, NAV goes up and your BLT tokens are worth more. When the pool loses, NAV goes down and your BLT tokens are worth less.
Example: A vault holds $1,500 in total value with 1,000 tokens in circulation — each token is worth $1.50. You deposit $150 and receive 100 tokens. Later, the vault grows to $2,000 in equity. Each token is now worth $1.8181, and your 100 tokens are worth $181.818. Conversely, if the vault falls to $1,000 in equity, each token is now worth $0.909 and your 100 tokens are worth $90.909.
Deposit Cap
Each vault has a maximum capacity. Once the cap is reached, no new deposits are accepted until someone redeems their BLT from the pool first. Early depositors benefit from getting access before the cap fills up.
Depositing
Deposits are instant. You send USD and immediately receive BLT in return.
How to deposit and mint BLT：
Click Vault in the top-left corner of the page.
Click Deposit.
Enter the amount and click Mint $BLT.
Assets accepted: USD
Settlement: Instant
Minimum deposit: 1 USD
Pricing: Uses the higher of the current NAV or the 24-hour average NAV (this protects other BLT holders — see NAV Protection below)
Convenience options:
Auto Borrow — if you don’t have enough free USD to deposit into the vault, the system will automatically borrow the shortfall from the lending pool on your behalf and deposit the USD into the vault.
Auto Lend Redeem — if your USD is currently lent out, the system will automatically redeem it first and then deposit the redeemed USD into the vault.
Deposits may be blocked if:
The vault has reached its deposit cap
Your deposit is below the minimum amount
The vault’s price data is temporarily stale (typically resolved within minutes)
Withdrawing (Redeeming)
Withdrawals use a two-stage process with a 12 hour delay. This protects the vault from sudden outflows and gives the pool time to unwind positions if needed.
How to redeem BLT to receive USD
Click Vault in the top-left corner of the page.
Click Withdraw.
Enter the amount and click Submit redeem request.
Stage 1 — Request: You submit a redemption request. It enters a queue.
Stage 2 — Execution: Once the delay has passed, the system processes your request. Your BLT is redeemed, and you receive your corresponding share of the pool.
Key details:
Default delay: TBD (may vary by vault)
One request per vault — you can only have one pending redemption per vault at any time
Cancellable — you can cancel a pending request anytime before the request is fulfilled
BLT are not locked — your BLT remain in your balance during the wait
Partial or full redeemability — you can redeem some or all of your BLT
Pricing: Uses the lower of the current NAV or the 24-hour average NAV at execution time (protects other BLT token holders)
Redemption Example
You hold 500 BLT and request a full redemption. After the delay period, the system processes it:
Current NAV: $2.10
24-hour average NAV: $2.05
You receive: 500 × $2.05 = $1,025 USD
The system uses the lower of the two NAV values to protect other BLT token holders.
Redemption Statuses
Requested — waiting for the delay period to pass
Redeemed — successfully processed, BLT redeemed and USD returned to your account
Cancelled — the request was cancelled (by you, by an admin, or for other reasons)
Why a Redemption Might Be Cancelled
You cancelled it — you changed your mind and manually cancelled
System cancelled — an admin cancelled the request (e.g., during a vault shutdown)
Insufficient BLT — your BLT token balance dropped below the requested amount before the redemption was fulfilled
NAV Protection (TWAP)
To reduce manipulation risks, deposits and withdrawals compare the current (spot) NAV against a 24-hour time-weighted average NAV (TWAP). The system selects whichever price is more protective of other BLT token holders.
Operation
Price Used
Purpose
Deposit
Higher of spot or 24h avg
Prevent underpriced entry
Withdrawal
Lower of spot or 24h avg
Prevent overpriced exit
Under normal market conditions, the difference is expected to be minimal.
NAV Staleness: If the vault’s NAV hasn’t been updated in over 5 minutes, deposits and withdrawals are temporarily paused until a fresh data point is recorded. This is a safety measure and should generally resolve shortly.
Tracking Your Portfolio
You can calculate the value of your BLT easily:
Current Value = Number of BLT Tokens × Current NAV
P&L = Current Value − Total Deposited
ROI % = (P&L ÷ Total Deposited) × 100
Example:
Total deposited: $1,500
Total tokens: 700
Current NAV: $2.80
Current value: 700 × $2.80 = $1,960
P&L: +$460
ROI: +30.7%
Comparing Vaults and Lending
Feature
Vault
Borrow/Lend
What you do
Deposit into pool
Lend to borrowers
Source of returns
Pool performance
Interest payments
Downside risk
Losses to pool
Borrower default
Return predictability
Variable
Utilization-based
Withdrawal speed
Subject to delay
Instant (subject to liquidity)
Value movement
Pool value
Interest accruals
⚠️Risks & Important Considerations
Vaults are investment products and carry risk.
No guaranteed returns — NAV can decrease and you may lose the value of your deposited USD
Withdrawals are delayed — final amounts determined at time of fulfillment based on NAV calculations
Deposit cap limits access — once full, no new deposits until someone redeems their BLT
NAV staleness may temporarily pause activity
If your BLT balance drops below the requested amount before fulfillment of a redemption request, the redemption will be automatically canceled
Vaults are not savings accounts or stablecoin yield products. They are not insured in any way.
Frequently Asked Questions
Where does the yield come from?
The vault profits from trading performance — things like funding payments, and capturing spreads. When the pool profits, the vault’s value goes up and the NAV of BLT tokens increases. When the pool loses money, the opposite happens and the NAV of BLT tokens decreases. There is no fixed yield.
Is my money locked?
No. You can request a redemption of your funds from the pool at any time. There is a waiting period (12 hours) before the redemption is processed, but your BLT are not locked during that time.
Can I lose money?
Yes. The vault’s NAV can decrease if the pool has losing positions or the value of its assets has decreased. This is not a savings account or stablecoin product — it carries real risk and you may lose all or part of your deposited assets.
Why can’t I deposit?
The most common reasons are that the vault has reached its deposit cap, there’s a minimum deposit amount you haven’t met, or the vault’s price data is temporarily stale (which is generally resolved within minutes).
Why is my redemption amount different from what I expected?
The amount you receive is calculated when the redemption is actually processed (after the delay), not when you submitted the request. The vault’s NAV can change during that window. Additionally, the system uses the lower of the current NAV or the 24-hour average to protect other depositors.
What’s the difference between a vault and lending?
Lending earns you interest from borrowers. Returns are relatively predictable, though not risk-free - borrowers may default and in extreme market conditions losses are possible. Terminations of lent assets are generally instantaneous unless all lent funds are fully utilized or other similar conditions.
Vaults give you exposure to a pool of assets’ performance. The potential for higher returns comes with more risks, i.e. direct exposure to market conditions. Also, redemptions are only processed after a 12 hour delay to protect other depositors.
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