The Vault
CSL has no order book and no second trader waiting to take your side. The Vault takes it. Understanding the Vault is understanding where your PnL actually comes from.
What the Vault is
When you open a long on a Dragon Lore, nobody had to be shorting it for your order to fill. The Vault — a pool of USDC — becomes your counterparty automatically.
- You win → the Vault pays your profit, in full.
- You lose → your collateral is forfeited to the Vault.
- You get liquidated → the Vault seizes the collateral, minus the burn (below).
This is why positions fill instantly on markets where a real order book would sit empty for hours. It is also why the Vault must be defended: it is carrying every trader's risk at once.
Where the Vault's income comes from
| Source | Detail |
|---|---|
| Taker fee | 0.15% of notional on every position opened. Charged whether the trade wins or loses. |
| Losing collateral | What traders forfeit when they are wrong. |
| Funding spread | The protocol's cut of hourly funding between longs and shorts. |
Against that it pays out every winning position, in full, without discount.
How the Vault funds the burn
When a position is liquidated, the Vault does not keep all of it:
That 10% is a genuine leak: money that would otherwise have strengthened the pool is destroyed instead. The taker fee is what covers it. At 0.15% of notional, a steady flow of volume more than replaces what the burn removes — which is exactly why the fee sits where it does rather than at the 0.05% a book-based venue can afford.
What protects the Vault
| Guard | Purpose |
|---|---|
| Max collateral per position | No single trade can define the pool's day. |
| Open-interest cap per market | Bounds exposure to any one skin. |
| House-wide OI cap | Bounds total exposure while the pool is young. |
| Liquidation buffer | Positions close slightly before zero equity, so bad debt stays near zero. |
| Stale-price guard | No liquidations on a price the oracle has not refreshed. |
Can I provide liquidity to the Vault?
Not yet. During the beta the Vault is protocol-funded. Opening it to depositors means handing outside money the other side of leveraged traders — that ships only with published risk parameters, live open-interest data and a track record long enough to be worth reading. See Roadmap.