> 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:

| Component                 | Treatment                                                                                   |
| ------------------------- | ------------------------------------------------------------------------------------------- |
| Underlying liquidity      | Deposited into the Uniswap pool contract                                                    |
| Two-thirds of swap fees   | Retained as LP fees, claimable through Uniswap                                              |
| One-third of swap fees    | Accumulated for purchases in connected hedge markets                                        |
| Hedge settlement proceeds | Distributed 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.