Recent Upgrades

Featured Vaults

Featured Vaults on the home page went live last week, showcasing the highest-performing and most popular vaults to deposit with. Capital tends to flow where it is utilized most effectively, whether a new vault from a well-established CT trader or an anon consistently nailing market moves. This is your place to find a constantly evolving list of these top-tier managers.

The Trade Memos Feed

This brand-new feature is integrated directly into the Valio Discord. Memos allow managers to detail their trade reasoning as they enter and exit positions, giving depositors insight into whether they’re getting lucky or truly possess an edge. Smart depositors can now incorporate this feed into their due diligence process, so head over to the #memo-bot channel to get a real-time view of what all the managers are saying about their trades.

If you’re a manager who wants to get a lay of the land and see what other traders are doing, the memo bot is your new best friend: think of it as a constant feed of alpha.

Shipping Soon

Kwenta joins the roster of trading venues next, a much-anticipated integration that enables leverage trading on a litany of tokens. Spanning 75+ markets, Kwenta’s perp selection covers blue chips, altcoins, stables, and even RWAs like gold. Keep an eye on Twitter for the official announcement when Kwenta x Valio goes live.

New Initiatives

Trade Against the Machine

A vault actively managed by a GPT-generated TA bot came online last week. It examines metrics like RSI Divergence & Bollinger Bands to recommend trades, primarily for BTC & ETH. If your vault can outperform the bot (currently +1.3% returns) over the next 4 weeks, you’ll collect 4 extra Rewards Chest spins. Enter by 10/24 to qualify; all the info to get involved can be found in here:

Valio.xyz

@valio_xyz

How to get involved:

Anyone can test their edge against TATM, whether you're new to Valio or already managing a vault.

Creating a new vault? Preface the name with
(Ex. Human Capital) and deposit >$50 to trade.

Have an existing vault? Set your vault photo to

3

12:18 PM • Oct 11, 2023

Manager Deep Dives

Last week we took a look inside PerfectGent’s top-performing D.I.T.R vault. Get insight into his entry/exit strategy, risk framework, leverage usage, and more in our Deep Dive. PerfectGent’s vault is an excellent example of how Valio allows depositors to leverage a trader’s expertise and research as he analyzes BTC liquidity conditions to identify high-leverage, short-timeframe trade opportunities. Expect a second Deep Dive with another top manager coming soon.

Valio.xyz

@valio_xyz

Becoming a top vault on Valio is the path to getting backed by institutions and whales. With a sizable AUM, you can turn trading into a profession by earning management and performance fees.

Curious how a top performing manager is making a name for himself on Valio?

We got in

24

1:20 PM • Oct 12, 2023

Coming Up

As you can see, we’re very busy working to make Valio the best experience possible for depositors and managers. Have something you’re eager to see implemented or improved? Let us know in the Discord how we can improve.

On the docket for the coming weeks is to build a better view for the “My Positions” page so that you can get a more holistic view of your holdings on Valio. Profile pages will give you all you need to know about a manager before depositing with them. And last but not least, the elusive private Telegram chat for manager-to-depositor communication.

Stay tuned with all of it on our Twitter, and keep racking those SZN0 rewards!

Vault Thesis

A strong investment thesis and a clear description of your strategy are the basis of any asset management strategy. Tell depositors what to expect from your vault and explain your management style concisely. DocXBT gives us an excellent example here. Specifying your strategy's time frame is critical to finding aligned depositors and building AUM.

You want to ensure your vault goals and trading style are clear from the beginning: this will minimize depositor turnover.

Manager Communications

Once your vault is created, there are a handful of ways to provide updates, both in the Valio Discord and publicly on your vault page for anyone to view.

• Updating the Valio Pulse section gives potential and current depositors insight into your current market sentiment, activity levels, and the types of trades you have in mind. Show them you’re tapped into the current market by updating the Pulse to reflect your evolving views.

• One of the best methods for getting the word out about your vault is to link your Twitter account on Valio. It will appear next to your name, giving depositors quick access to your feed. Doing this while consistently tweeting about your trades and thought process is a surefire way to increase your depositor base. Depositors want to put their money behind someone putting themselves out there, whether fully doxxed or an anime pfp anon. Building in public will go a long way!

• Utilizing Trader Memos to cement your expertise! Our latest communication feature, Memos, allows you to provide timely information on trades and market views. Memos overlay on a vault’s performance chart, enhancing the transparency of a manager’s performance history. Depositors want to see the reasoning behind their manager’s moves, and it’s a major boost to your track record when they can see that you’re making well-thought-out trades and not just getting lucky.

  

  Valio.xyz

  @valio_xyz

  

  Ever wish you could get inside the mind of your favorite trader when they're about to execute a trade?
  
  We have some good news for you...
  
  Short thread on our latest addition to help depositors evaluate vaults and allow managers to show off their talents.

  

  36

  1:43 PM • Sep 29, 2023

• We have the Manager Talk Discord channel to connect with fellow managers and discuss strategy, promote your vault, talk about market conditions, or raise any questions. Discord will play an even more important role in the future as we’ll deploy private channels between managers and depositors. This will allow you to directly field questions from your depositors and add a more personal touch to your management services. Keep an eye on the Valio Twitter account for a release announcement.

Trading Venues On Valio

Valio supports 0x on Arbitrum, Optimism, and Ethereum, allowing managers to spot-trade 70+ tokens. Managers can access GMX, where BTC, ETH, LINK, and UNI are currently supported for leverage trading. Next up will be Kwenta on Optimism, one of the premier platforms for leverage trading, offering Valio managers various altcoins to work with.

When it comes to chain navigation, all deposits will initially come through Arbitrum, but bridging funds to your desired chain for trading is simple. Under the “Manage” page, you can easily transfer funds between chains and use the enabled trading apps seamlessly.

In Summary

Equipping managers with a suite of depositor communication tools and the most extensive selection of on-chain trading platforms are top priorities for Valio. Managers who leverage these tools and actively cross-promote their vaults on social channels will have a huge advantage in growing their AUM.

As part of our efforts to build in public, we want to make sure that all of your needs are covered as a vault manager. How else can your management experience be improved on Valio? Let us know in the Discord! https://discord.com/invite/valio

• UI/UX improvements

• New tokens available for trading

• User Feedback

• Who is creating vaults on Valio, and why

Let’s dive in.

Protocol Improvements

Two essential upgrades to the user interface were made early in Valio’s debut; adding a visualization of CPIT usage and turning on fee collection.

As you may recall, CPIT is Valio’s proprietary mechanism for limiting the price impact of managers’ trades. It’s a necessary safeguard to prevent managers from using depositor funds to pump and dump a token for personal gain and a huge step forward for on-chain asset management. For managers to better plan trades with CPIT in mind, the daily usage percentage is now clearly displayed on the vault management dashboard.

The second adjustment was the activation of fee collection for managers. Here’s a brief refresher on how Valio manager fees work:

• Management fees are flat fees for depositing in a given vault, expressed as an annual % and released to managers each block to be claimed at any time.

• Performance fees are return based and can be claimed at a “high water mark,” meaning when vault value surpasses the point at which the manager previously claimed fees.

• Both types of fees are fully customizable during the vault creation process.

New Token Additions

Wen more tokens? We’re constantly getting requests to add support for trading pairs on Arbitrum and Optimism. Our list of available tokens on Valio is currently 50 and growing. Here’s what we most recently added on Arbitrum:

• agEUR

• HMX

• ARCHI

and Optimism:

• KWENTA

• LYRA

• PIKA

• THALES

• BOB

• rETH

• VELO

• TAROT

• EXTRA

Expanding the investable universe on Valio is a high priority, and this is only the beginning. If there’s an Arbitrum or Optimism token you’d like to see next, let us know! More tokens and new chains are always in the works; we can guarantee that as a manager, you will have access to everything you need to make money on Valio.

And we’re adding support for Ethereum mainnet real soon, so be ready for this list of new token additions to grow!

Reward Chest Campaigns

We’ve got an exciting rewards program set up for our devoted SZN0 participants, and you can learn more about the specific details here. While we periodically issue reward chest spins (you can find all updates on our Twitter), we’ve got some unique programs LIVE to help sweeten the deal.

GMX Traders

Anyone who has previously used GMX for trading will recieve EXTRA reward chest spins just for opening a vault on Valio. Why?

Valio currently supports GMX for leverage trading (Kwenta soon👀), and we love our friends building GMX, so we wanted to sweeten the deal for the blueberry community and give them a taste of what Valio offers. For traders on GMX, creating a vault on Valio just makes sense:

Valio.xyz

@valio_xyz

You're already trading on GMX, so why not take your talents to Valio and use the SAME exchange?

Your trading is already public so why not get discovered by vault depositors and grow your AUM?

It's a win-win

Create a vault today: app.valio.xyz

5

11:30 AM • Aug 16, 2023

Zealy Campaign

Want to get more involved? We’re frequently adding fresh quests to our Zealy page and rewarding the top spots on the leaderboard with reward chest spins.

Check out our Dashboard here:

Join Valio

Bet on your favourite traders and let them make money for you. Valio is the talent discovery marketplace connecting traders and asset managers to capital in a trustless and non-custodial way. Built on Layer0.

https://zealy.io

Of course, all Discord members know these updates, so make sure you join the community and get involved in the conversation.

User Feedback

We’re constantly looking for ways to improve Valio from both a user and manager perspective, so if you have any feedback you’d like to share, don’t hesitate to drop a message in the suggestions Discord channel → discord.gg/valio.

Here’s what SZN0 users have been saying so far:

“Valio offers a unique opportunity not found anywhere else in crypto. As a depositor, it's helped me discover winning traders to back, so I can spend more of my valuable time with family. As an asset manager, it's helping me establish my community. I look forward to the platform's continued growth and, with Valio's help, assisting Web3 users on their journeys. New or old to crypto, there's a way to win with Valio!”

Who’s Managing Vaults on Valio?

It’s incredible to see 140+ vaults already created, with new managers joining Valio ranks daily. What we’ve seen so far is that managers typically fall into a few categories.

Established Crypto Players

Crypto Linn is the quintessential example, with an established brand and following from consistently delivering alpha via Twitter and a newsletter. Linn’s audience believes in their theses, and Valio is the ideal way for Linn’s followers to bet on their long-term success. Depositors get to leverage Linn’s extensive knowledge and experience rather than having to handle research and trade execution themselves.

Linn can monetize their expertise through management and performance fees. Valio also makes it easy for Linn to advertise their vault and communicate directly with depositors through Discord and Twitter integrations. Whether you’re a respected CT alpha hunter, running a Discord or Telegram trading group, or are a well-known DeBank whale, Valio is the optimal platform for offering your asset management services. Your followers will be much better off depositing with you than mindlessly trying to copy-trade your moves.

Talented Anon Traders

On the other end of the spectrum are the undiscovered traders with no time to build a Twitter following. Too busy sifting through on-chain data and researching new trade setups, these traders seek ways to create an audience and leverage their trading skills.

Take your talents to Valio and let your trades speak for themselves as you build a public track record. If you’re sitting high on the leaderboard and proving your success, it won’t be long before depositors notice, and you find your vault at the top of the explore page. Moreover, depositors don’t need to trust managers thanks to Valio’s safeguarding mechanisms, making it much less risky to take a chance on an undiscovered trader. And again, Valio’s social integrations make it easy to communicate with depositors on your strategy and start to build a following if that’s your goal.

SZN0 and Beyond

It’s phenomenal to see the traction that Valio has gained over just a few weeks since its launch. We’re excited to have a slew of upgrades in the queue that will only improve your experience on Valio, one of them being ETH mainnet support!

SZN0 rewards and trading competition will be live, so explore everything the platform offers, keep up with Quests on Zealy, and join the community on Twitter & Discord to stay updated on what’s coming next.

Earning Reward Chests

Trading Competition rewards are based on both trader or depositor activity on Valio and via community social channels. Make sure to explore the entire platform and keep up with activity quests on Zealy for maximum reward potential. Your rewards will come in the form of Rewards Chest “Spins”, so whenever you’re feeling lucky, head over to the MySZN0 page and use the spins you’ve accumulated to receive a Common, Rare, Legendary, or Mythic Chest.

The number and rarity of Chests represent a user’s participation in SZN0 and will signal eligibility to claim a reward at a future date.

Monday August 7th - SZN0 Public Access period commences; anyone can join Valio and participate in the trading competition to accumulate reward chests.

Stay updated in our Discord and Twitter throughout SZN0!

In the high-risk, high-reward world of crypto, few have what it takes to rise the ranks and become a successful degen. You can learn from the best, join the highest signal telegram group, and master the art of on-chain trade execution, but nothing guarantees excellent returns.

On the everlasting quest for alpha, you may look to those above you for advice in hopes of replicating their success. However, simply trying to follow the best traders on the market or “copy trading” them won’t work, leaving you with unsatisfactory results. Starting July 24th, shift your focus from searching for the next 100x coin to finding the next 100x trader. On Valio, you will be able to discover and invest with the most skilled traders in crypto.

Valio is a trustless, non-custodial, and chain-agnostic way to unlock the full potential of on-chain asset management. Back talented traders in crypto or monetize your skillset, and it all starts with SZN0.

SZN0 Schedule

The launch consists of 2 phases.

Early Access Opening on 7/24

If you applied for early access, connect to Guild.xyz with your wallet and Discord account. Accepted users will unlock the SZN0 Whitelist channel in the Valio Discord server. This channel will provide all the necessary information for early access and guidance on initially navigating Valio. Early access users will also get a head start on earning platform rewards as part of the SZN0 trading competition, which come in the form of lootbox spins. Completing tasks and climbing the leaderboards will increase your level, unlocking more spins for chances to win Basic, Rare, and Legendary rewards. We’ll also reserve a secret lootbox tier for only the top-performing users of SZN0.

Public Access Opening on 8/7

Following the two weeks of early access, Valio will open up to the public. At this point, we invite all traders and depositors to participate in SZN0; create vaults, deposit with your favorite traders, and earn lootbox rewards until the end of SZN0 (to be determined.) 

Platform Features

Valio is a platform that connects traders to capital in a completely trustless manner. On the platform, traders and depositors have many features to help them perform their best. Whether in portfolio management or screening for the top-performing traders that fit a specific investor’s goals, we’re sure you’ll have everything you need to succeed.

Vault Navigation

Every trader has their own style, and every depositor has their own goals. Valio has powerful vault exploration filters so depositors can find exactly what fits their risk profile, timeline, sentiment, and preferred sector. Say you’ve been hearing a lot of buzz about GameFi and want to add some exposure to your portfolio, or you’re after a long-term market-neutral lending strategy; you can specify all these parameters to find exactly what you want. 

Once you’ve set your filters, matching vaults will be displayed with daily, weekly, and overall return metrics to see which traders have outperformed. On the flip side, traders can use these labels to advertise their vaults better, making it easier to be discovered by prospective depositors. 

Vault Creation

Managers will find the vault creation process to be quite straightforward on Valio. It starts with naming and detailing the thesis for your vault, then selecting the chain you’ll be trading on. GMX on Arbitrum and 0x on Optimism will be available for SZN0 as the gas cost advantages are optimal for a new user base to test the platform. Additional chains and trading venues will be added in the near future. 

The next step in vault setup is to select a risk profile to determine the amount of price impact your trades are allowed under Valio’s CPIT parameters (more on this novel depositor protection mechanism later). After establishing a risk profile, managers can set up a customized fee structure with options for management and/or performance-based fees. 

Lastly, managers are encouraged to give depositors insight into their trading mindset in a short ‘Pulse’ on their profile. Beyond creating vaults, managers can connect their Twitter & Discord accounts to Valio to connect with their CT audience and directly communicate with depositors. Maximum vault AUM for SZN0 is set to $10,000, so make full use of these features for better visibility on your vault as you climb the trading competition leaderboard. 

Position Management

This section contains everything to do with your deposits; the vaults you’ve allocated funds to, individual vault and total return stats, and deposit and withdrawal functionality. These features are all in one place for a smooth experience and clear performance visibility. 

On-Chain Asset Management Redefined

An elegant user interface is essential, but what’s under the hood truly sets Valio apart in the asset management sector. 

• Omnichain Accessibility

• Depositor Safeguards

• Instant Withdrawals

Omnichain Access via LayerZero

When it comes to on-chain assets, the investable universe is massive and constantly expanding. New chains, assets, and trading protocols are launched all the time. Building Valio on top of LayerZero allows it to support the on-chain investable universe more than similar platforms. And as the industry matures, the product offering through Valio will continue to grow. Traders and depositors will have greater access to investment opportunities through this omnichain infrastructure and unified liquidity across chains. 

Depositor Safeguarding Through Self-custody and CPIT

Self-custody is central to the decentralized ethos of crypto and the idea of true ownership, which Valio fully supports. Time and time again, crypto investors have encountered the woes of custodial platforms like FTX and Celsius, where depositing assets with these institutions required users to trust that their funds weren’t being mismanaged behind closed doors. It’s an unnecessary counterparty risk. 

Depositors on Valio will always retain custody of their assets and formidable safeguards have been developed that eliminate the need to place trust in managers. Part of this protection exists in the whitelisting process for trading protocols, as managers can only deposit funds in Valio-approved platforms. The other element is Valio’s proprietary CPIT mechanism, which prevents malicious trading activities within the whitelisted protocols. Depending on a vault’s risk profile, it is assigned a Cumulative Price Impact Tolerance. This percentage limits the price impact a manager’s trades can have, preventing the siphoning of funds through artificial market displacement. Put simply, a manager can’t use depositor funds to pump a token they own in a personal wallet and then dump their own tokens at the inflated price. Valio is the first platform to solve this problem.

Instant Withdrawals

This goes hand in hand with depositor safeguarding; deposited assets on Valio belong to you, and access to liquidity should be instant. After an initial 24-hour period, deposited funds can be withdrawn at any time, either in kind with the tokens in your portfolio or consolidated into a single token like ETH or USDC. Automated exit strategies can also be implemented for exiting vaults based on a stop-loss, take-profit, or a CPIT parameter. 

Welcome to Valio

We’re beyond excited to bring you the future of on-chain asset management. Build your public reputation, discover talented traders, and experience the power of trustless omnichain asset management. Welcome to SZN0.

As we approach our mainnet launch, we're excited to reveal key protocol features, launch offerings, and future plans in our third installment of the Intro to Valio series.

Live Demo

Before our launch, we built a live working demo deployed at: https://demo.valio.xyz/.

Feel free to take it for a spin. The purpose of the demo is to showcase the ease of exploring a broad selection of vaults. While you won’t be able to create a vault or deposit funds today, we’re shipping the final product with the launch of our trading competition later this month.

Users can view featured, top-performing, and index (lower-risk) portfolios on the Valio homepage; however, note that the index portfolio currently serves as a placeholder. As you can gauge, some of these will be handpicked by Valio (e.g., featured vaults), while other featured vaults will be the best performers for a given period. The homepage will also display a curated list of the top-performing managers. This means that depositors will have a host of vaults to choose from, each with different risk and return profiles. The vaults are managed by various managers who will trade and/or invest on the depositor's behalf. They can then take it a step further by visiting the Explore page.

Here, a depositor can search through all available vaults and play around with the filters to find the perfect manager - one that fits their risk profile and investment style.

On the My Positions page, depositors can view a comprehensive snapshot of all their investments. They can view the different vaults they’ve invested in, returns generated based on different durations, portfolio asset allocation, and vault activity. This page contains all the necessary data to assess the performance of their investments and provides transparency into how each vault is being managed.

Now let’s explore the manager’s point of view.

Under the Manage page, a manager can view their active vaults. They can view the total AUM, number of depositors, and net P&L. Furthermore, they can edit their profile, which can also be done from the top right corner at all times. Nonetheless, this allows them to upload a custom avatar, link their Twitter handle, and write a bio. New vaults can quickly be spun up on this page as well.

This is a brief overview of what Valio will offer at launch. We encourage you to take a look and experience it for yourself, and we will have plenty more features integrated at launch.

Social Media Integrations

Establishing reliable and trusted communication channels between managers and investors is crucial for promoting a community-centric investment management experience. Therefore, when a vault is created, a private Discord server is automatically generated. This enables investors to interact with one another and communicate effortlessly with the manager, ensuring they stay informed about any vault activity.

In addition to Discord, we recognize the significant role that Twitter plays in building a personal brand and reputation within the industry. As a result, every manager can connect their Twitter handle to their profile. This not only serves as a communication channel but also can help to legitimize the vault manager. It will go the other way too, wherein a talented manager (who may not have an active Twitter following) can grow an audience by providing exceptional results to their investors and be discovered by the masses. After all, we’re building a talent discovery marketplace.

Trading Competition

We’re excited to announce that we’ll be launching “Season 0” of Valio later this month. This trading competition will be structured to incentivize and reward budding vault managers. The competition will benefit managers who can generate outsized returns for their investors and depositors who pick the most talented managers to invest their capital with.

The first set of managers to have access to the platform will be a whitelisted group of users. After a week has passed, the platform will open to the public. The trading competition is intended to last 7 weeks. The maximum deposit amount per wallet will be $500, and the maximum fund AUM will be capped at $5,000. These limits will be lifted in due time. 

Rewards will be aimed at users who demonstrate exceptional portfolio performance and are actively engaged with the platform, regardless of whether they achieve significant trading success. Keep an eye on Discord and Twitter for more information about loot boxes and tips on maximizing your rewards.

Partner Protocols

An essential part of Valio is the various partner protocols that we integrate with. Being built on top of LayerZero means that the possibilities are infinite. However, we have established a thorough vetting process to ensure that only top-rated, trusted, and genuine DeFi protocols are supported. While Valio aims to provide a wide variety of trading platforms for managers, ensuring depositor security will always be a top priority when considering new integrations. This means potentially passing up on allowing users to deposit and trade using newer projects with high emissions schedules. Again, the goal is to serve depositors and managers at the highest level.

Our initial launch will utilize GMX and 0x to access various trading pairs and sufficient leverage for our degen traders. We look forward to continuing to grow this list in the future.

Conclusion

This caps off our intro to Valio blog series. We’ve laid out the opportunity of bringing asset management on-chain, dove into Valio’s core innovations, and presented the roadmap leading up to the launch. We’re excited to bring the future of asset management to the people, giving traders all the tools they need to operate top-tier funds and giving investors a unified marketplace for discovering talented traders. 

There are plenty more details regarding the impending mainnet launch and Season 0, so stay in the loop by following us on Twitter and joining our Discord server.

Our previous write-up shows that on-chain asset management is an emerging industry with massive potential. While current solutions have made commendable progress, none have fully capitalized on the available opportunities, as most existing platforms are limited to a single blockchain. As we move toward a multi-chain future, web3 native traders will prefer chain-agnostic protocols to establish their strategic portfolios. Built on top of LayerZero’s interoperability infrastructure, Valio will provide seamless omnichain access.

Security and trust requirements remain significant concerns for all stakeholders, especially depositors. Valio addresses this by introducing a novel security architecture called CPIT (Cumulative Price Impact Tolerance), which eliminates the need for trust between managers and depositors.

In this follow-up installment to our initial blog post, we’ll dive deeper into how we intend to support managers, provide a safe platform to depositors and touch on some fundamental protocol mechanics.

Omnichain Accessibility

Valio’s omnichain accessibility is enabled by LayerZero, an omnichain interoperability protocol that allows dApps to connect across multiple blockchains. LayerZero has developed a proprietary messaging architecture for trustless and efficient cross-chain functions between protocols.

By integrating LayerZero, Valio grants portfolio managers access to various trading platforms and instruments on multiple networks, such as 0x on Ethereum and GMX on Arbitrum at launch. Access to numerous other chains and asset classes is expected shortly. This flexibility allows managers to make more informed decisions regarding trading strategies and asset allocation. Managers can switch between platforms and chains effortlessly without compromising security or performance. Furthermore, omnichain dApps significantly reduce user friction, as depositors can participate irrespective of what blockchain they are connected to. Omnichain access defragments liquidity, inevitably helping managers attract more capital and increasing the growth potential for portfolios on Valio.

Portfolio Monetization

Another benefit for managers is that they can set up their fee structure and how they monetize their portfolios. Managers can choose between two types of fees: management fees and performance fees. Management fees are accrued for each deposit over time. The manager can claim the fees at any time or wait until the depositor adds to or reduces her position; then, the fees will be automatically distributed. Performance fees are charged as a percentage of the portfolio’s profits and are calculated based on a high watermark. A high water mark (HWM) is the highest value the portfolio has ever reached and ensures that managers only get paid for incremental performance above and beyond the HWM.

Transparency, Communication, and the Social Aspect of Crypto Trading

As Valio attracts talented money managers to its platform, it will be a marketplace for depositors looking to allocate their capital. Valio assists portfolio managers in building a reputation and fostering a community around their portfolios. Managers can link their Twitter accounts to their portfolios, so followers can easily find their favorite trader’s Valio portfolio. Managers can also create private whitelisted portfolios that are only accessible to those they invite, such as friends, partners, or clients. This will allow Valio to serve the entire market for on-chain asset management, from retail investors to firms and treasuries.

Valio also offers unique communication channels between portfolio managers and depositors. Private Discord channels are automatically created for each portfolio, where depositors can chat with the manager and other depositors, ask questions, give feedback, or share ideas. Depositors can also view the manager’s social accounts, such as Twitter, where they can follow their updates and announcements.

Safeguarding Depositors

Valio provides depositors with a safe and convenient platform to bet on traders without needing to trust them. Depositors can achieve diversified exposure to the decentralized asset management industry: from short-term leverage traders to long-term capital allocators and everything in between, the possibilities are endless.

One of the core innovations Valio introduces in its novel security architecture is Cumulative Price Impact Tolerance (CPIT). CPIT is a mechanism that protects depositors from nefarious portfolio managers attempting to steal portfolios by creating artificial market displacement.

How do malicious portfolio managers try to steal user portfolios?

1. Send portfolios to a wallet in their control → Easy to solve; portfolios can only be sent to whitelisted protocol addresses

2. Transfer portfolios to a protocol that may be susceptible to exploitation, either intentionally or unintentionally → Easy to solve with strict due diligence before integrating new protocols

The third and much more difficult problem to solve would be done by a manager taking the following steps:

• Obtain a stake in a lower market cap crypto asset using a private wallet

• Utilize the Valio portfolio assets to increase the token’s value via market buys

• Sell the crypto from the private wallet, effectively transferring wealth from the portfolio depositors to the manager by impacting the token’s price.

This is akin to a pump-and-dump scheme; to mitigate this risk, the portfolio manager sets a CPIT limit. Essentially, CPIT is a way to measure how much the price of an asset changes due to the trades made by the portfolio manager. The higher the CPIT, the more the price is affected by the trades. For example, if a portfolio has 1 million USDC worth of assets, and the CPIT is set to 5%, then the manager can create 50,000 USDC in price impact across all trades on that given day.

In summary, CPIT limits the price impact managers can create with the capital they manage, expressed as a percentage of the AUM for any given day. The CPIT value is established on portfolio creation and cannot be changed.

Here’s a quick rundown of the mechanism at play.

CPIT Mechanics

The portfolio manager evaluates three primary variables before every buy or sell transaction, namely:

1. InitialPrice (the price before the transaction)

2. Amount (the trade amount)

3. ExecutionPrice (the price at which the trade is executed)

For each transaction,

PriceImpactLoss(USD) = (Execution Price - InitialPrice) * Amount

PriceImpactLoss provides a simple way to determine the loss incurred in each trade due to price impact. The value is smaller in highly liquid markets such as ETH/USDC spot and more significant in more illiquid ones.

Next, the total amount lost by the manager due to adverse price impact can be determined for a given period (in the case of portfolios, each day) by summing up the individual PriceImpactLoss values, which is known as TotalPriceImpactLoss(USD).

TotalPriceImpactLoss(USD) = SUM(PriceImpactLoss)

To express the daily loss in USD as a percentage of the total net asset value (NAV) in the portfolio, the resulting value is called CumulativePriceImpact. The maximum cap for cumulative price impact, CumulativePriceImpactTolerance, is an instantiated variable set upon portfolio creation that ensures the daily limit is not exceeded before executing any trade.

CumulativePriceImpact = TotalPriceImpactLoss(USD)/NAV

It is expressed in percentage terms relative to the portfolio size.

Instant Withdrawals

Crypto-natives prioritize instant liquidity, especially concerning recent insolvency issues on major CeFi platforms. At Valio, we understand this need and ensure that depositors' capital remains accessible: after an initial 24-hour period, users can withdraw their portfolios at any time.

Depositors have two withdrawal options: in-kind (receiving a proportionate share of each asset in the portfolio) or converting their stake into a single token, such as USDC or ETH. Moreover, Valio enables users to establish automated exit strategies based on stop-loss, take-profit, and CPIT parameters.

Instant withdrawals are a priority, and specific criteria must be satisfied before integrating a protocol with Valio. For example, suppose a user wants to exit their position in a portfolio. In that case, the entire portfolio will be liquidated pro-rata, up to the amount the user wants to withdraw, to ensure that there is never a higher liquidation risk for remaining depositors. You can learn more about instant withdrawals here.

Conclusion

In summary, Valio is a platform that caters to various use cases of asset management, such as treasury management, trader portfolios, individual trade strategies, social portfolios, etc. Think of us as a super dApp for all your decentralized asset management needs - serving managers and depositors of all sizes and different risk tolerances.

Valio is the first on-chain asset management platform to take full advantage of blockchain technology by being omnichain, non-custodial, trustless, transparent, and flexible.

Stay tuned as we’ll explore the future for Valio as we approach the launch on Mainnet.

Traditional Asset Management: Value and Drawbacks

Starting from square one: why is asset management valuable? In the world of TradFi, asset managers oversee more than $100 trillion in funds globally. These professionals range from individual financial advisors to multibillion-dollar hedge funds, each operating with specific investment goals and risk profiles. Instead of researching, executing, and monitoring their own investments, individuals and institutions entrust asset managers to carry out actions on their behalf. In exchange for their service, money managers typically charge fees for both management and performance. Plain and simple, asset management gives retail investors access to the expertise and resources of professionals.

Nonetheless, TradFi asset management leaves much to be desired, and the advent of blockchain technology has opened up the door to solving many of these issues. Some of the notable problems with traditional asset management:

These factors are the driving force behind the burgeoning on-chain asset management sector. As blockchain technology continues to permeate the world of finance, demand for a new generation of asset management services will as well, presenting a massive opportunity for platforms that can better connect investors and managers.

Current State of On-Chain Asset Management

Platforms currently available for crypto asset management solve some of the issues outlined above; transparency is achieved through immutable on-chain records, setting up vaults and onboarding deposits can be done much faster, and depositors retain custody of their funds. However, current platforms often lack the versatility that managers desire and the level of security required to assure depositors.

On versatility, platforms out right now are limited in scope. Most are constrained to a single chain and sometimes to a single trading platform. When options are limited to, say, Ethereum only or GMX only, then depositors and managers miss out on opportunities in the broader crypto asset class. Moreover, some platforms will cater specifically to retail investors or specifically to institutional investors and treasuries. The ideal platform would provide options for both, unifying the on-chain asset management marketplace.

To the second point, security is a massive concern when it comes to on-chain asset management, which presents an opportunity for innovation. At the base level, blockchain-based platforms allow depositors to retain custody of their assets, which has proven to be a top selling point for DeFi. Transparency is another element of security where crypto platforms win out, as depositors can view in real time what actions managers are taking. The most difficult security issue to solve so far has been achieving trustlessness between depositors and managers. For the existing on-chain asset management solutions, trust in vault managers is a prerequisite for depositing, as loopholes for misuse of funds are not properly addressed.

How Valio Optimizes On-Chain Asset Management

Valio’s core purpose is to provide an all-encompassing solution for on-chain asset management. It’s designed as a seamless talent discovery marketplace, where top traders can quickly spin up vaults, and investors can easily find an option that fits their goals and risk profile. Whether you are a retail investor looking to allocate capital with talented traders or looking for management strategies geared towards protocol or DAO treasuries, Valio makes it simple to find a vault that fits your needs.

Valio is built on top of LayerZero, offering users a natively omnichain experience. This removes the limitations encountered by other asset management platforms, allowing traders access to the best financial instruments on a wide variety of chains. Beyond increasing access to new trading opportunities, omnichain functionality allows managers to seek out deeper liquidity or lower transaction fees. More choices for managers mean better returns for depositors.

Due to the level of control that vault managers have over funds, preventing manipulation is top of mind for Valio. The simple fix is to prevent managers from sending vault funds to a personal wallet or trading in a non-approved protocol that may have a high chance of being exploited.

However, a more complex issue has yet to be solved by existing platforms. Nefarious vault managers can siphon funds out by making trades with large price impacts. This method involves the manager buying up a small cap token that they personally hold in a separate wallet, then dumping their own tokens at the artificially elevated price. Valio addresses this risk with its proprietary CPIT mechanism. CPIT (Cumulative Price Impact Tolerance) prevents managers from performing this type of pump-and-dump activity by restricting trades that have a large price impact. CPIT is expressed as a percentage and is established upon vault creation.

If a manager is frequently losing money on illiquid or small-cap tokens but trading within the price impact constraints, it may indicate a miniature version of this pump-and-dump scheme. In this case, depositors are advised to withdraw from the vault. Valio places no restrictions on withdrawal size or timing aside from an initial 24-hour lockup upon deposit.

This mechanism and its importance will be explored in full in an upcoming blog post, but the core concept is that it makes the economics of rugging a vault through price manipulation non-viable compared to the up-front cost of building up a sizable AUM.

In Summary

Valio is stacking together the value of asset management, the advantages of bringing it on-chain, and the versatility of omnichain, all in an intuitive and secure platform. Traders will have all the tools necessary to build an on-chain track record and monetize their expertise, while investors, treasuries, and funds will be able to find vaults that fit their specific goals.

We’re extremely excited to introduce the future of asset management. Stay tuned for part two of our intro series, which dives deeper into the mechanisms that power Valio.