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# Introduction

## What are VTFs?

Paradex Vault Traded Funds (VTFs) are a powerful new DeFi primitive, setting a
new standard for on-chain asset management. Each VTF operates under a single
**portfolio margin** account that can trade **perpetual futures, options, and
spot** giving operators the full range of instruments available on Paradex
within one vault.

A single VTF can also run **multiple segregated strategies**
simultaneously, enabling operators to combine delta-neutral, directional, and
volatility strategies without needing separate vaults.

VTFs are fully permissionless, meaning anyone can deposit and earn a share of the
profits. Users can choose between DIME VTFs, Verified Operator VTFs, or Community
VTFs, or create their own VTF and start trading with complete flexibility.

## Who should use VTFs?

* An Investor looking for higher yields or returns? → Become a Depositor
* An Asset Manager looking for a larger capital base? → Become an Operator

## Benefits for Investors (Depositors)

1. **Access to Professional Multi-Asset Strategies**\
   Benefit from experienced operators trading perps, options, and spot under
   portfolio margin, often running multiple segregated strategies within a
   single VTF for optimized risk-adjusted returns.
2. **Potential for Enhanced Returns**\
   Pooling your assets with others allows participation in more scalable trading
   strategies not typically accessible to individual investors.
3. **Greater Diversification**\
   Invest across multiple VTFs of different risk profiles and strategy types to
   achieve diversification benefits.
4. **Transparent and Secure Management**\
   VTF operations are governed by smart contracts on the blockchain, providing
   full transparency and allowing you to monitor your assets at any time.

## Benefits for Asset Managers (Operators)

1. **Access to Larger Capital Pools**\
   Manage significant pooled assets from multiple depositors. Trade perps,
   options, and spot from a single portfolio-margin account, and run multiple
   segregated strategies within one VTF to maximize capital efficiency.
2. **Configurable Parameters**\
   Set profit sharing percentages between 0% and 30% to attract investors and
   reward your expertise. Operators can also configure other parameters like the
   lockup period and the max TVL.
3. **Order Privacy**\
   The off chain order book ensures your orders are fully protected from front
   running, ensuring trades are executed without external manipulation.
4. **Operational Efficiency**\
   Streamlined VTF management with efficient withdrawals and automated processes
   reduces administrative overhead.
5. **Paradigm Integration**\
   Move significant size without slippage or market impact through Paradigm RFQ,
   enabling institutional-grade block trading directly from your VTF.
6. **Reputation Building**\
   Successfully managing a VTF and delivering consistent returns builds
   credibility, attracting more depositors and opening doors within the DeFi
   ecosystem.