> For the complete documentation index, see [llms.txt](https://docs.vigilan.market/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.vigilan.market/pool-and-earn/vigilan-protected-pools.md). # Vigilan Protected Pools Vigilan Protected Pools integrate hedging into selected Uniswap v4 liquidity pools. The current public Pool page describes a mechanism that directs one-third of swap fees toward buying Hedge (Yes) positions on Vigilan's order book. When the associated market's qualifying condition is met and the position pays, proceeds are routed back through the pool's protection mechanism. The page currently features a BNB/USDT protected pool. See [Protected Pools](https://app.vigilan.market/pool) for availability and pool-specific details. #### What the mechanism changes Part of the pool's fee income is used to fund event-contract positions. This creates a trade-off: less fee income remains immediately available from swaps, while purchased shares can produce a payout in a qualifying scenario. The current pool explanation describes the following flow:
ComponentTreatment
Underlying liquidityDeposited into the Uniswap pool contract
Two-thirds of swap feesRetained as LP fees, claimable through Uniswap
One-third of swap feesAccumulated for purchases in connected hedge markets
Hedge settlement proceedsDistributed automatically to wallets based on contribution, without a separate claim action
This automatic distribution is specific to the Protected Pool mechanism. It differs from claiming an individually purchased market position through Portfolio. The protection depends on the associated market rules, actual execution, available liquidity, and the number of hedge shares acquired. A fee allocation is a funding mechanism, not a guaranteed payout amount. #### Before adding liquidity Review the pool, chain, underlying tokens, fee allocation, hedge trigger, and treatment of payouts. Use the official pool link from the app and follow the pool interface's liquidity instructions. Adding liquidity to a standard pool does not automatically enroll that position in a Vigilan Protected Pool. The relevant pool and integration must support the mechanism. #### Understanding performance figures Loss-offset figures describe a stated comparison over a particular period. They are not a promise to reimburse that percentage of every LP's future loss. Modeled benchmark losses can differ from the performance of your own position. Pool returns depend on fees retained, underlying inventory performance, hedge spending, hedge payouts, and other applicable costs. Protection does not remove liquidity, token, hook, smart-contract, or settlement risk. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.vigilan.market/pool-and-earn/vigilan-protected-pools.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.