Risks
Understand the potential risks associated with staking and how we mitigate them.
As with all yield, staking your SOL at The Vault incurs some risk. However, we only deploy funds to audited protocols that have been running for a very long time.
🔍 Smart Contract Risk
vSOL utilizes a few smart contracts:
Stake pool: We use the official, audited Solana stake pool program. More information can be found here.
Staking: We use Quarry for staking. Quarry is open source and has been audited by Quantstamp. Notably, it has handled billions of TVL in the past few years without issues. More information can be found here.
Providing liquidity: Our main liquidity pool is hosted by Sanctum and Saber. Bramah Systems has audited Saber. Like Quarry, it has handled billions of TVL without issues. More information about Saber can be found here. Sanctum has been audited by several firms, and the information can be found here.
📉 DePeg Risk
vSOL basically has two different definitions of the price: the "real" price and the market price.
The real price is the intrinsic value of vSOL, calculated by taking the total amount of SOL managed by the stake pool and dividing it by the total amount of vSOL in circulation.
The market price fluctuates based on buy and sell demand.
For example, if there is 1 million vSOL in circulation and the stake pool manages 1.1 million SOL, the real vSOL price is 1.1 SOL. The real price only increases, but one can only "withdraw" their SOL from vSOL using our delayed unstake option.
This retrieves the underlying stake accounts, which can be unstaked manually. This takes until the next epoch (up to 3 days) to take effect, so selling your vSOL for the real price cannot be done instantly.
To instant unstake, one can sell on the open market. However, note that:
The market price can fluctuate based on buy/sell demand.
If a vSOL holder needs substantial liquidity immediately, the market price may drop below the real price due to price impact in the liquidity pool.
These price differences are temporary, as arbitrage traders will close the gap over time.
When the real and market prices differ significantly, this is called a DePeg. Particularly when dealing with leverage, one should consider DePeg risk as it can trigger liquidations.
⚔️ Slashing Risk
Solana has a concept of slashing when validators act in bad faith. Because we allowlist validators in our delegation strategy, this should not be an issue.
However, apart from this, slashing is not currently implemented in Solana, so this risk does not presently exist.
🛠 Unstaking Using the CLI
vSOL is provided through the SPL stake pool program, which operates independently from The Vault. Using the SPL CLI to unstake or stake SOL is possible, ensuring you are not dependent on The Vault’s dApp being available.
Steps to Unstake via CLI:
Install the CLI from here.
Export your private key from your wallet (if needed). For Phantom, follow these instructions.
If using a Ledger, you do not need to export the keypair. Instead, provide the key as an option to the command:
--keypair usb:\ledger?key=0\0
The
0\0part should match your key derivation. For wallets imported to Phantom, use0,1,2, etc. For wallets created more recently, use0\0,1\0,2\0, etc.
Use the withdraw-stake command:
spl-stake-pool withdraw-stake Fu9BYC6tWBo1KMKaP3CFoKfRhqv9akmy3DuYwnCyWiyC 5
This unstakes 5 vSOL.
After unstaking, you will have a native active stake account in your wallet. Deactivate it, then withdraw your SOL in the next epoch.
Phantom users must follow these instructions to complete the process.
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