$msDAI Vault

To earn trading fees of Mu, you can stake $sDAI into our sDAI Vault, which is an $msDAI vault that receives a sizable portion of the Mu Exchange trading fees and serves as the counterparty to all trades made on Mu:

  • When traders win (positive PnL), their winnings are received from the vault.

  • When traders lose (negative PnL), their losses are sent to the vault.

In exchange, by staking your $sDAI, you will receive $msDAI, representing shares of the msDAI Vault and the underlying $sDAI assets.

Collateralization of the vault depends on overall Mu Exchange traders' total Profit and Loss. Hence, if overall traders lose, the msDAI Vault will earn protocol fees plus trading yield. On the other hand, if overall traders are winning, as long as fees earned by the Mu Exchange platform are still more significant than the net winning payouts, the msDAI Vault will have a positive return.

To further protect the msDAI Vault, Mu Exchange also has maximum open interest and maximum net open interest systems with parameters that change periodically to maximize the security and protection of the vault. More details can be found in the Open Interest sections of this docs.

How to earn from msDAI Vault:

  1. Obtain some $xDAi for gas and connect your web3 wallet to mu.exchange. For new users, the guide can be found at Getting Started On Gnosis Chain

  2. Stake your $sDAI into our msDAI Vault via https://www.mu.exchange/staking.

    1. Type in the amount of $sDAI you wish to stake.

    2. Click [Stake] and confirm the transaction on your web3 wallet.

    3. Multiple confirmations on your web3 wallet might be required, especially if it is your first time using Mu.

    4. Do pay attention to the details, including the transaction amount and gas fee, when confirming the transaction.

  3. Details, including your staked amount accumulated rewards, can be found on the same webpage.

How to withdraw your $sDAI from the vault and how to claim the earned rewards and trading fees:

  1. All trading fees and trading yield rewards (if any) are accrued automatically back into the msDAI Vault; hence, there is nothing a user needs to do; all these will be reflected automatically in the msDAI token you hold.

  2. Users can withdraw their $sDAI anytime; there is no lock-up period but a 24-hour withdrawal cooldown.

  3. Withdrawal can be made on the same page where the staking was done; click the "Unstake" tab, enter the amount, and click "Unstake."

  4. Confirm the transaction on your web3 wallet and pay attention to the details, including transaction amount and gas fee, when confirming the transaction.

Understanding the Vault Mechanism

When a user enters the $msDAI pool, the $msDAI represents the current Net Asset Value (NAV). Depending on what NAV you enter and exit at would ultimately affect your position.

For example, If a user enters the vault and some traders lose money from trading or are liquidated on the platform, the NAV will increase, and the staker will profit. The opposite also holds.

Last updated