Introduction

Vanna is a specialized leverage protocol designed to revolutionize decentralized finance by facilitating leveraged derivatives trading. It enables users to access leverage directly in a DeFi-native environment and apply it across various DeFi platforms. With Vanna Protocol, traders can leverage their positions in perpetuals, options, and spot markets on their preferred platforms, engage in delta-neutral strategies such as covered calls, iron condor, basis trading, protective puts, leveraged farming, and optimize these strategies dynamically through a sophisticated Greeks dashboard.

Protocol Structure:

Vanna Protocol operates on a two-sided protocol model. On one side, liquidity providers deposit assets to earn passive yields through the Supply Rate, benefiting from a dual-reward structure similar to what is seen in lending protocols like Aave or Compound. On the other side, leverage takers, including traders and strategic investors, borrow these assets with minimal collateral through Margin Accounts to execute complex trading strategies with up to 10x initial leverage, which can be layered to achieve up to 100x leverage across different DeFi markets.

The core functionality of Vanna Protocol revolves around Margin Accounts.

Margin Accounts:

Margin Accounts in Vanna Protocol are isolated smart contracts that hold both user-provided collateral and borrowed funds. They serve as the operational hub for leveraging activities, allowing all transactions and strategies to be executed within a secure, automated environment. This setup not only facilitates high-leverage trading but also supports dynamic risk management and strategic adjustments.

Funds in these Margin Accounts act as collateral for debt positions, and users can manage their exposure by opening positions in futures protocols like GMX, Avantis, and Perp, or options protocols such as Lyra. Traders can execute spot trades on Uniswap and utilize hedging tools like the Greeks dashboard to implement delta-neutral strategies. The integrated Greeks dashboard provides real-time monitoring and automated recommendations, enabling traders to manage their positions effectively and optimize strategies based on changing market conditions.

Key Features:

• Composable Leverage: Vanna Protocol does not host its own order book or trading environment. Instead, it allows traders to utilize leverage across multiple DeFi protocols and assets, enabling composable trading strategies. For example, users can perform derivative hedging or create complex positions by integrating with platforms like Lyra, Aevo, GMX, or Perp.

• Zero Funding Rates: Vanna Protocol itself does not charge any funding rates on leveraged positions. However, any funding rates from third-party perpetuals and options protocols, such as GMX, Avantis, or Derive, are automatically included in the trading costs. Additionally, borrowing rates on the assets leveraged through Vanna protocol will also apply. This ensures that while Vanna facilitates leveraging with real assets, all associated costs, including those from external protocols and borrowing activities, are transparent and predictable for users.

• Leverage-as-a-Service: vanna protocol allows other protocols to offer leverage directly to their users through the Margin Manager without altering their existing architecture. This approach enables these protocols to gain access to Vanna’s user base and liquidity pools.

• Unrestricted Strategy Building: Traders can utilize Vanna’s Margin Accounts to implement sophisticated, permissionless trading strategies, such as delta-neutral trades, covered calls, or options spreads, across integrated DeFi platforms.

• Advanced Risk Management with Greeks Dashboard: vanna protocol integrates a Greeks dashboard that offers real-time data and automated recommendations for managing key metrics like delta, gamma, and theta, enabling traders to optimize their positions dynamically and maintain balanced portfolios.

• Efficient Gas Usage: vanna protocol optimizes gas usage by processing transactions and strategy adjustments within isolated smart contracts, minimizing costs for users.