Meteora
  • Meteora: The most dynamic and sustainable liquidity layer on Solana
  • PRODUCT OVERVIEW
    • Meteora Liquidity Pools
      • DLMM Overview
        • What is DLMM?
        • DLMM Program
        • Dynamic Fees
        • Strategies & Use Cases
        • DLMM Farming Rewards
      • DLMM Launch Pool Overview
      • Dynamic AMM Overview
        • What is a Dynamic AMM Pool?
        • Dynamic AMM LP Fee and APY Calculation
        • Creating a Dynamic AMM Pool via the UI
        • Claiming Fees from Permanently Locked Liquidity
        • Dynamic AMM Stable Pools
        • Dynamic LST Pools
        • Additional yield from Dynamic Vaults
        • Dynamic AMM Farm Overview
      • DAMM v2 Overview
      • Memecoin Pool Overview
        • Memecoin Pool v2
          • What is Memecoin Pool v2?
        • Memecoin Pool v1
          • What is Memecoin Pool v1?
          • Permanently Locking Liquidity
      • Stake2Earn Pool Overview
        • What is a Stake2Earn Pool?
        • Stake2Earn for Launchpads
      • Multi-Token Stable Pool Overview
    • Alpha Vault Overview
    • Dynamic Vault Overview
      • What is a Dynamic Vault?
      • Dynamic Vault Program
      • Hermes - Meteora's Keeper
        • Algorithm to find optimal yield allocations
        • Rebalance crank
        • Operation fee calculation
      • Design Goals
      • Security
      • Dynamic Vaults Whitepaper
      • Dynamic Vaults Community Explainers
      • Affiliate Program for Dynamic Vault
        • Become an Affiliate Partner (Dynamic Vaults)
    • Dynamic Bonding Curve (DBC) Overview
      • What is the Dynamic Bonding Curve?
      • Customizable Pool Configuration
      • Bonding Curve Formula
      • DBC Migrator Keeper
  • Meteora's Anti-Sniper Suite (A.S.S.)
    • Meteora’s Anti-Sniper Suite
      • Dynamic Fees
      • Fee Scheduler
      • Rate Limiter
      • Alpha Vault
  • INTEGRATION
    • DLMM Integration
      • DLMM SDK
        • DLMM TypeScript SDK
        • CPI Examples
      • DLMM API
      • Fetching information on locked liquidity in a DLMM
    • Dynamic AMM Pool Integration
      • Dynamic AMM SDK
        • Dynamic AMM TypeScript SDK
        • CPI Examples
      • Dynamic AMM API
        • Pool Info
        • Pool State
      • Setting Pool and Fee Config for Dynamic AMM Pools
      • Create Dynamic Pool with Timestamp/Slot Activation
      • Dynamic AMM - Farm Integration
    • DAMM v2 Integration
      • DAMM v2 SDK
        • DAMM v2 TypeScript SDK
        • DAMM v2 Rust SDK
      • DAMM v2 API
      • Setting Pool and Fee Config for DAMM v2
      • Technical FAQ
    • Memecoin Pool Integration
      • Memecoin Pool v2 Integration
        • Setting Pool and Fee Config for Memecoin Pool v2
      • Memecoin Pool v1 Integration
        • TypeScript Code Examples
        • CPI Examples
        • Setting Pool and Fee Config for Memecoin Pool v1
        • Track permanently-locked liquidity in Memecoin Pool v1
        • Track Protocol Fee from swaps in Memecoin Pool v1
    • Stake2Earn Pool Integration
    • Dynamic Vault Integration
      • Using TypeScript-Client
      • Using Rust-Client
      • Using CPI
      • Vault API
        • Vault Info
        • Vault State
      • Vault Developer Resources
    • Alpha Vault Integration
      • Alpha Vault TypeScript SDK
      • Alpha Vault without Whitelist Setup
      • Alpha Vault with Whitelist Setup
    • Dynamic Bonding Curve (DBC) Integration
      • DBC SDK
        • DBC TypeScript SDK
        • DBC Rust SDK
      • DBC Fee Scheduler Formula
      • DBC Scripts
      • Program Repo
      • Launchpad Template
      • Technical FAQ
  • TOKEN LAUNCH POOLS
    • Steps to Create a Pool for a Token Launch
      • Create: DLMM Launch Pool
      • Create: Dynamic AMM Pool
      • Create: Memecoin Pool v1
      • Create: DAMM v2 Pool
      • Create: Stake2Earn Pool
      • Create: Pools with Alpha Vault
        • Create: DLMM Launch Pool with Alpha Vault
        • Create: Dynamic AMM Pool with Alpha Vault
        • Create: Memecoin Pool with Alpha Vault
        • Create: Stake2Earn Pool with Alpha Vault
    • Anti-Sniper Fee Suite for a Token Launch
  • Resources
    • Audits
    • Meteora Program IDs
    • Meteora APIs
    • Devnet Testing
    • Community Data Dashboards & Tools
    • Meteora Brand Assets
    • THE MASSIVE METEORA STIMULUS PACKAGE
      • Overview
      • 1. Dynamic Liquidity Market Maker (DLMM)
      • 2. Formation Of An LP Army DAO
      • 3. The 10% Stimulus Proposal
  • USER FAQ
    • Getting Started LPing
      • Supported Wallets
      • Prepare SOL
      • SOL required for Rent
      • What is Wrapped SOL?
      • What is an AMM?
      • What does it mean to provide liquidity?
      • How to swap to the tokens required for adding liquidity to a pool
      • How to quickly check if a token has any risks
      • Viewing your transaction history
      • My wallet has been compromised. What should I do?
    • Differences between DLMM and Dynamic Pools
    • DLMM FAQ
    • Dynamic AMM FAQ
      • How is the pool price of the token calculated in a Dynamic AMM?
      • What is a Meteora LP token?
      • How do I see fees earned on a Dynamic AMM Pool?
      • How to track your earnings for a Dynamic Pool?
      • What is Virtual Price in a Dynamic Pool?
      • How do LP tokens, fees, and virtual price work for Dynamic Pools?
      • Why must I add liquidity in non-stable Dynamic Pools using a 50:50 value ratio?
      • What is AMP in a Dynamic Pool with stable coins?
      • Why is the USDT-USDC pool not 1:1 in ratio of assets?
      • Can I create an LST, FX, or Multi-token pool using the Dynamic Pool creation tool?
    • Alpha Vault FAQ
    • Why is the token sometimes not picked up and tradable on Jupiter?
    • How do I create a new farm?
    • Video Tutorials to Get Started
      • LP Army Boot Camp
      • DLMM Strategy Sessions / Jam Sessions
  • Security and Risks
    • Risk of Impermanent Loss (IL)
    • Risk of depositing into an imbalanced pool / pool with price out of sync
    • Smart contract risk
    • Risk of a stablecoin depeg
    • Operational risk for dynamic vaults and pools
    • Lending risk for dynamic vaults and pools
  • legal
    • Terms of Service
    • Stake2Earn Terms of Service
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On this page
  • How does Dynamic Vaults work?
  • 1. Vault
  • 2. Keeper - Hermes
  • 3. SDK Module (Integration APIs)
  1. PRODUCT OVERVIEW
  2. Dynamic Vault Overview

What is a Dynamic Vault?

PreviousDynamic Vault OverviewNextDynamic Vault Program

Last updated 3 months ago

Meteora Dynamic Vaults is DeFi’s first dynamic yield infrastructure, where the vaults rebalance every minute across lending platforms to find the best possible yield while prioritizing keeping user funds as accessible as possible.

  • Our off-chain yield optimizer keeper program will calculate the yield across all the lending platforms.

  • Every few minutes, the off-chain keeper will constantly monitor the key metrics within each lending pool/protocol.

  • The keeper will pick the highest APY based on the keeper calculation and deposit to the respective lending pools.

  • As the lending pools fluctuate based on its usage, a rebalance would occur every few minutes if necessary.

  • Key metrics includes: Total Deposit, Deposit Limits, Pool Utilization Rate, APY, and more

Having a trusted capital allocation layer is important to help allocate liquidity to where it is needed the most, while mitigating risks that come along when depositing to these lending protocols. By providing a trusted and optimized way for users to participate in DeFi lending, we will attract more capital and participants to the ecosystem, driving innovation, and growth.

The vaults prioritize safety by monitoring utilization rates and reserve levels, and withdrawing funds if thresholds are reached. To ensure secure yields, we have maximum allocation measures based on factors like audit, open-source code, and insurance coverage of lending platforms. These measures will be consistently refined with the community.

How does Dynamic Vaults work?

Meteora Dynamic Vaults allow users and integrated protocols to deposit and/or withdraw assets from the vault program at any time. Deposited assets are distributed to various lending protocols like Solend and Tulip, with maximum allocation based on a combination of yield percentages and risk mitigation strategies around protocol audit, insurance coverage, and open source status.

Fig 1: Meteora Dynamic Vaults overview

The system will consist of 3 main components:

1. Vault

Each Vault in the infra layer stores single token assets, e.g. USDC or SOL, and the majority of the assets will be allocated to various lending protocols to earn yield. The common tokens used in each connecting protocol, AMM or wallet will be stored in a single vault, e.g. USDC from AMM, and the wallet will be held in the USDC vault. Users and protocols can deposit liquidity to each Vault directly through a simple interface.

2. Keeper - Hermes

We’ve created an off-chain keeper - Hermes to manage more complex logic and operations i.e. lending protocol monitoring and calculating optimal liquidity allocation across lending platforms etc.

In the upcoming days, as Meteora launches the MET token and establishes the DAO with governance capabilities, the community will play a pivotal role in shaping the platform's future. The DAO will actively engage in discussions and strategic planning to determine liquidity allocation across partners' lending protocols. This decentralized decision-making process will further strengthen Meteora's position as a collaborative and community-driven DeFi ecosystem. Exciting times lie ahead as we collectively drive Meteora towards greater success and sustainability.

For now, there are 3 main operations handled by Hermes:

Yield Optimizer - Hermes will calculate the liquidity allocation across the lending platforms that will generate the most optimal overall APY for the vault. The calculation will require key data from the various lending platforms i.e. Deposit APY, utilization rate, liquidity in the pool, etc. This process will repeat once every few minutes, and if there is a delta between the new allocation and the current one, a rebalance crank will be sent to the vault to trigger deposits and withdrawals to/from the lending platforms.

Key Metrics Tracker - As indicated above, the calculation of liquidity allocation requires various key data such as deposit APY and liquidity in the pool from the lending platforms. The tracker will consistently monitor, track and store this information in the system for use in calculations and for future references. These data are also exposed to potential integrators for them to display on their UIs or to support their own calculations or logic.

Risk Monitoring - Hermes also runs a risk monitoring service to track utilization rates and reserve levels of lending protocols to safeguard user assets, ready to withdraw liquidity when thresholds are reached. For example, if the utilization rate of a lending pool is above 80%, Hermes will send a transaction to the vault to trigger a full liquidity withdrawal from the pool. All deposits into the pool will also be stopped for 12 hours, giving us sufficient time to investigate and assess if we will continue deposits or stop them completely until further notice. Full details of the various mechanisms are discussed in Security

3. SDK Module (Integration APIs)

To make it easy for DApps and Protocols like AMMs and wallets to integrate with our Dynamic Yield Layer, we have created a straightforward SDK and are building up an entire library of pre-built modules and code samples for rapid app development and plug-and-play.

The liquidity in the protocols can be deposited into or withdrawn from the vaults directly via simple API calls. The vaults’ yield can be distributed back to the LPs of the integrated protocols.