Vault

Loss rebates

When a position closes at a loss or is liquidated, the amount credited to the Vault, L, mints TLP worth r × L at equity per share, directly to your wallet in the same transaction. The rest, (1 − r) × L, stays with existing holders.

Where a credited loss goes · example$980 credited to the Vault after a $1,000 loss (the $20 protocol fee is carved out first), at a 1% rebate rate.

r × L · $9.80 in TLPMinted to the losing trader at equity per share, in the same transaction.

(1 − r) × L · $970.20Stays in the Vault with existing TLP holders.

How much

Case	Credited amount L
Loss close	the loss, net of the protocol fee when one is charged.
Liquidation	the forfeited margin, net of the protocol fee when one is charged.
Position funded from queued profit	the canceled queued amount, net of the fee when one is charged.

All losing positions closed with one signature are combined into one L. Winning positions in the same batch do not offset it. Deposits, openings, unrealized losses and winning or break-even closes mint nothing.

Mints a rebate

Losing closeLiquidation

Mints nothing

DepositOpeningUnrealized lossWinning closeBreak-even close

Rebate rate

The rebate rate r depends on the state of the Vault. It never leaves the range 0.5% to 10%, which is hard-coded in the contract.

1.5% → 1%Queue empty, equity positive: r falls as the pool grows, from 1.5% for a near-empty pool to 1% once equity reaches $5 million.

1.5× → 1×Launch boost: for the first $2 million of cumulative credited losses, r is multiplied by a factor falling from 1.5× to 1×, capped at 2%.

2% → 10%Winners queued, or equity at or below zero: r rises with the shortfall, from 2% at zero to 10% once the shortfall reaches $500,000.

0.5%–10%Hard-coded range: r never leaves it.

For a $1,000 loss: at $10 million equity after launch, r is 1% and the rebate is $9.80; at about $100,000 equity early on, r is 2% and the rebate is $19.60; with winners queued and a $250,000 shortfall, r is 6% and the rebate is $60; at a $500,000 shortfall or more, r is 10% and the rebate is $100.

Vault state	Rebate rate	Rebate on a $1,000 loss
$10 million equity, after launch	1%	$9.80
About $100,000 equity, early on	2%	$19.60
Winners queued, $250,000 shortfall	6%	$60
Shortfall of $500,000 or more	10%	$100

Rebate rate r · while no winners are queued

At launch · cumulative credited losses C = 0, 1.5× boostAfter launch · C ≥ $2M, no boost

Equity A, including the open profit and loss of every position facing the Vault. Higher when the pool is small; the launch boost (first $2M of credited losses) is capped at 2%.Queue empty: r = clamp(boost(C) × g(A), 0.5%, 2%) · g(A) = 1% + 0.5% × max(0, 1 − A ÷ $5M) · boost(C) = 1 + 0.5 × max(0, 1 − C ÷ $2M)

Rebate rate r · while winners are queued

Rebate rate r while winners are queued, or while equity is at or below zero

Shortfall = max(0, −A'): how far equity is below zero after the close batch is settled.Queued or A' ≤ 0: r = 2% + 8% × min(1, shortfall ÷ $500K) · shortfall = max(0, −A')

Both caps sit below what a paired long and short loses to the price buffer, the asymmetric deduction and the protocol fee, so opening both sides to farm rebates loses money. A rebate returns a small part of a loss; it does not make a losing trade profitable, and rebate TLP is worth r × L only at the moment it is minted.

Floor price

Rebates and deposits mint TLP at the higher of equity per share and a floor price. The floor is 30% of the highest equity per share the Vault has reached and only ever rises. When the pool has lost enough that equity per share is below the floor, including zero or negative equity, TLP is minted at the floor, so nobody can take a very large share of the Vault for a very small amount after it is wiped out. TLP minted at the floor is worth less than r × L until the pool recovers.

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