> For the complete documentation index, see [llms.txt](https://docs.tryliquid.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tryliquid.xyz/vaults/what-are-vaults.md).

# What are Vaults?

Vaults on Liquid are pooled on-chain accounts that give you exposure to a trading, market-making, or yield strategy. Learn how deposits, profit sharing, and risk work.

A **vault** is an on-chain pooled account where users deposit funds and get exposure to a strategy. A vault can be run by a professional risk manager like [Gauntlet](/vaults/gauntlet-vaults.md), by an individual trader, or by an automated strategy. Vaults are how Liquid lets you put idle capital to work without managing positions yourself.

### When You Deposit Into a Vault

* Your funds are pooled with other depositors
* The vault executes a strategy, such as stablecoin lending, trading, or market making
* You share in the vault's profit and loss (PnL) based on your share of the vault
* You also take on the strategy's risk, and vaults can lose money

Vaults are a flexible primitive that can support advanced strategies, including high-throughput market making and liquidation-related strategies, not just simple token rebalancing.

### Types of Vaults on Liquid

* **Gauntlet Vaults (Liquid Earn).** Stablecoin yield curated by Gauntlet. No lockups, variable APY, lower risk profile. See [Gauntlet Vaults](/vaults/gauntlet-vaults.md).
* **Trading vaults.** Pooled accounts that run a trading or market-making strategy. Higher potential return with higher risk, and some vaults have a lockup period after each deposit.

### How Profit Sharing Works

For user-run trading vaults, depositors receive the vault's performance pro rata, and the vault leader typically receives a 10% share of profits. Gauntlet Vaults show their fee structure and current APY directly on the Earn screen.

### Lockups and Withdrawals

Gauntlet Vaults have no lockup. Some trading vaults have a short lockup period after your most recent deposit before withdrawals become available. The lockup, if any, is shown on the vault's page before you deposit.

### Important Risk Note

Depositing into a vault is not passive savings. You are exposed to the underlying strategy's outcomes, and past performance does not guarantee future returns. Evaluate any vault carefully before depositing, and only deposit what you are comfortable putting at risk.