Vanna Finance
  • Overview
  • Protocol overview
    • Earn
    • Margin Account
    • Strategy
      • Strategy Example(Future and Spot)
      • Strategy Example with Option Protocol
      • With Option, Future, and Spot Protocol
    • Prop DashBord
    • Risk Management
  • Vanna WhitePaper
  • Protocol Fees
  • Security
  • Link Tree
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  • Introduction
  • Margin Account
  • Prop Dashboard
  • Summary

Overview

NextEarn

Last updated 7 months ago

Introduction

Welcome to the documentation of Vanna, a proprietary derivative trading protocol. Vanna represents a decentralized financial platform designed for composability, leveraging, and hedging. It is built on Arbiturm, Linea, and Base, offering users the ability to initiate undercollateralized loans, leverage positions up to 1000x, and hedge to minimize risk. Vanna operates as a two-sided protocol, catering to entirely distinct markets. On one side, liquidity providers offer liquidity unilaterally without incurring a permanent loss, much like lending actions observed in platforms such as AAVE and Compound, enabling them to earn passive APY. On the other side lies innovation: the leverage taker, who borrows this liquidity but utilizes it with leverage in DeFi. There's no requirement for KYC for borrowing, no reliance on a trust score (credit score), and no need for under-collateralization. The leverage taker essentially utilizes the liquidity provided by the passive provider (lender) in options protocols, futures protocols, and the equity market. How is leverage achieved in a permissionless manner without requiring KYC or relying on a trustless system? In this context, leverage is facilitated by pooling both the capital supplied by users and the capital they borrow into a Margin Account, which serves as the central mechanism for the process..

Margin Account

Introducing the Margin Account, a new feature within our platform. It functions as an isolated Margin contract containing both borrowed funds and the user's own capital. Think of it as a specialized DeFi wallet designed for leveraging, complete with Liquidation management and comprehensive asset management capabilities.

When engaging with the derivative protocol, such as initiating an "Open Long" position in the Future Protocol, executing a "Sell Call" in the Option Protocol, or making a "Buy Equity" transaction in the spot market, users can seamlessly operate through the Margin Account. Although the Margin Account remains under the ownership of the User/Borrower, withdrawing funds isn't as straightforward due to predefined rules within the Margin Account. These rules dictate user interactions, allowing engagement solely with permitted assets and contracts. This measure serves to mitigate dependency risks and ensures smooth functionality within the Margin Account framework.

Prop Dashboard

Vanna introduces an innovative visualization tool called the Prop Dashboard, providing users with a detailed overview of their active future and option positions, along with their behavior in relation to derivative Greeks. This feature empowers users to analyze and manage their positions with a forward-looking approach, thereby improving their hedging effectiveness. Especially beneficial in traditional markets, this functionality streamlines thorough position analysis.

Summary

Vanna operates as a two-sided protocol, enabling passive lenders to supply funds accessible to Vanna borrowers. Borrowers leverage the Margin Account, akin to a Margin contract, to generate leverage from the LP position. They can then utilize this capital in the Derivative option and future market to execute various hedging strategies, such as Covered Call, Short Gamma, Strangle Strategy, and more.