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# Risk-On & Risk-Off Vault

### How Did the Risk-On & Risk-Off Vaults Perform Historically?

**Risk-On Vault **

The Risk-On Vault indicates a stable yield of 15-25% APY.

We're improving the overall performance by hedging the current weights and trader open interest (OI) of ETH and BTC, while also implementing threshold-based rebalances. This strategy reduces hedge costs and variance in profit and loss (PnL).

**Backtest 1 : Hedge 60% Long/Short OI)**

- v1 : Mainnet Performance (Hedging Target Weights)
- v2 : Backtest Performance (Hedging Current Weights + Trader OI)

**Improvements : **

**128% improvement**total performance**40% reduction**in trader PnL**45% reduction**in delta PnL**55% reduction**in hedge cost**95% reduction**in mint/redeem cost

**Backtest 2 :** **Hedge 100% Long OI, 60% Short OI**

- v1 : Mainnet Performance (Hedging Target Weights)
- v2 : Backtest Performance (Hedging Current Weights + Trader OI)

**Improvements:**

- 295% improvement total performance
- 98% reduction in trader PnL
- 35% reduction in delta PnL
- 50% reduction in hedge cost
- 95% reduction in mint/redeem cost

**Risk-Off Vault **

The Risk-Off Vault yield is at 6-8% APY compared to the ~0.5% supply APY on Aave

The source of yield comes down to two components :

- Lending interest on Aave
- ETH yield split from GLP