Sub-vault

A market-specific allocation inside dYdX's MegaVault that runs automated market-making for that one market. The results of all sub-vaults are aggregated and shared across MegaVault depositors as a whole.

Definition

A sub-vault is one market’s slice of a larger vault. The MegaVault does not trade as a single strategy: it splits capital into per-market allocations, each quoting and holding inventory in its own market, and then pools the outcomes.

Why the structure is split

Market making is market-specific. Spreads, volatility and the amount of liquidity a market needs differ, so the capital allocated and the risk taken have to differ too.

Splitting into sub-vaults lets each market be managed on its own terms while depositors keep a single, simple position: a share of the whole.

What that means for a depositor

You do not choose markets and you cannot opt out of one. Your return is the blend, so a strong sub-vault and a losing one net against each other before anything reaches you.

That is diversification, with the usual limitation: in a market-wide move the sub-vaults tend to be hit in the same direction, which is when the pooling helps least.

It also means the headline yield tells you very little about what is underneath it. Two periods with the same aggregate figure can hide entirely different distributions across markets.

What to look at

Which markets have sub-vaults and how capital is distributed between them, since that is the actual exposure. Newer or thinner markets carry more inventory risk per unit of capital than established ones.

And the withdrawal terms, because vault capital is generally not available instantly.

Where you will run into it

In dYdX’s MegaVault documentation and dashboards, and whenever a new market listing raises the question of where the liquidity backing it comes from.