SIP-5B introduces Community Vaults, allowing anyone to create and manage onchain trading strategies, fund market making and help secure markets.
SIP-5 lowered the once extremely high barrier to listing assets on the platform, giving us a glimpse of what Universal Markets looks like; SIP-5A handed the role of market makers, which had previously been shrouded in mystery, over to users; and this latest SIP-5B has activated the capital layer, bringing the 1,000,000 Universal Markets we’ve previously discussed gradually into view.
Three Types of Community Vault
The Community Vault is an on-chain liquidity pool that also acts as a connector, linking the various StandX ecosystems together. Whereas users could previously only hold DUSD to earn interest, they can now choose from a wider range of options to deploy various strategies and earn returns.
Currently, SIP-5B has three types of vaults, which are:
- Community Strategy Vault: Allows users to deploy their own trading strategies to earn money
- Community Reward Vault: Allows users to act as market makers to earn trading fees
- Community Shield Vault: Allows users to invest in market insurance to earn money
Through these options, users can choose the one that best suits them to participate in building the StandX ecosystem.
Strategy Vault
The Strategy Vault is essentially “decentralized, on-chain copy-trading funds.” They allow anyone to package trading strategies into on-chain investment products and attract community capital based on their on-chain track record, helping grow their asset base. For ordinary investors, simply depositing funds makes it easy to follow experienced traders and share in the returns. At the same time, the platform requires portfolio managers to contribute at least 5% of the capital from their own pockets, helping ensure they don’t recklessly gamble with retail funds, so users can feel more confident entrusting their assets here.
Reward Vault
The Reward Vaults is essentially a “community-funded market-making subsidy pool.” They move away from the traditional model in which crypto projects rely solely on platform token mining and other subsidies to maintain liquidity, allowing users to contribute their own funds to create dedicated market-making reward pools for trading pairs they believe in. These rewards are distributed to market makers who place orders through the SIP-5A mechanism, thereby increasing market liquidity. This approach not only improves the trading experience but also creates a long-term, self-sustaining incentive model that doesn’t depend on token devaluation.
Shield Vault
The Shield Vault acts as the market’s “insurance mechanism.” Their operation is straightforward: they isolate the risk of each trading pair. When the market experiences extreme volatility and the trading floor cannot absorb liquidation orders, the vault steps in to cover those orders, helping the market transition smoothly. The model is similar to an insurance company collecting premiums, where investors deposit funds to assume tail risk in exchange for a steady stream of liquidation fees and premium income. At the same time, Shield Vaults provide a buffer that helps prevent extreme events from rippling across the broader market.
Summary
SIP-5B is not a standalone feature; it is a key piece that completes the “Universal Markets” ecosystem. It integrates SIP-5: Universal Markets Listing and SIP-5A: Community Maker Yield, enabling community users to manage the full workflow, from launching trading pairs and providing liquidity to contributing capital for backstops, within a single platform. The feature is currently in a limited alpha testing phase. After real-market testing is complete, it will be fully launched, gradually moving toward the ultimate goal of “1,000,000 Universal Markets.”