> ## Documentation Index
> Fetch the complete documentation index at: https://docs.decibel.trade/llms.txt
> Use this file to discover all available pages before exploring further.

# DLP Vault

> The protocol-owned vault that provides exchange liquidity and serves as the backstop liquidator. Uses the same vault infrastructure as user-created vaults, continuously quoting bid/ask prices across all supported markets.

The Decibel Liquidity Provider (DLP) Vault is a protocol-owned [vault](/for-traders/vaults) that solves the chicken-and-egg problem every new exchange faces: you need liquidity to attract traders, but you need traders to attract liquidity.

## The Bootstrap Problem

New exchanges face a cold start challenge:

* Traders won't come without tight spreads and deep books
* Market makers won't provide liquidity without trading volume
* Neither side wants to move first

The DLP Vault breaks this cycle by providing initial liquidity from day one.

## How It Works

The DLP Vault acts as a designated market maker, continuously quoting bid and ask prices across supported markets. It absorbs order flow that would otherwise go unfilled, ensuring traders can always execute at reasonable prices.

### Key Properties

* **Protocol-owned.** Not dependent on external market makers staying
* **Algorithmic pricing.** Quotes derived from oracle prices with dynamic spreads
* **Risk-managed.** Position limits and exposure controls
* **Transparent.** All activity visible on-chain

### Backstop Liquidator Role

The DLP Vault also serves as a **backstop liquidity provider** in the liquidation waterfall. When a position is liquidated and there isn't enough counterparty liquidity in the orderbook, the DLP steps in to absorb the position — protecting the exchange from bad debt.

## Lockup Period

DLP Vault contributions have a **72-hour lockup period**. After contributing, you cannot redeem your shares until 72 hours have passed. This gives the protocol time to deploy your capital effectively and prevents rapid inflows/outflows that could destabilize the market-making strategy.

## Relationship to User Vaults

The DLP Vault uses the same vault infrastructure as user-created vaults, but with special parameters:

|                         | DLP Vault               | User Vaults                             |
| ----------------------- | ----------------------- | --------------------------------------- |
| **Manager**             | Protocol (automated)    | Any user                                |
| **Strategy**            | Automated market making | Manager's discretion                    |
| **Contribution lockup** | 72 hours                | 0–7 days (manager-configured)           |
| **Contributions**       | Coming post-mainnet     | Available now                           |
| **Fee structure**       | 0%                      | Manager-defined (0–10%, interval-based) |

## Timeline

| Phase                | Status                         |
| -------------------- | ------------------------------ |
| Internal testing     | Complete                       |
| Mainnet launch       | DLP provides initial liquidity |
| Public contributions | Coming post-mainnet            |

<Info>
  Public contributions to the DLP Vault will open after mainnet launch. Check back for updates on timing and terms.
</Info>

## Learn More

<CardGroup cols={2}>
  <Card title="How Vaults Work" href="/for-traders/vaults">
    Understanding the vault system and interval-based fees
  </Card>

  <Card title="Vault Integration Guide" href="/developer-hub/guides/vaults">
    Step-by-step guide to creating and managing your own vault
  </Card>
</CardGroup>