Permabear Strategy

A USDC-denominated vault that aggregates institutional crash-hedging derivatives. Adjustable burn rate from 60% to 95% annual decay. You lose everything in 5 years max. Asymmetric payoffs during crashes.

Who This Is For

Permabear is designed for users who strongly believe a major global downturn is coming within a specific timeframe. This product intentionally loses value in normal markets as it continuously buys crash protection.

If you expect markets to remain stable or grow, this vault is not suitable. Capital erosion is guaranteed. You are paying an ongoing insurance premium that bleeds your capital to zero in exchange for exponential upside during extreme market dislocations.

Adjustable Burn Rate

Continuous Decay Spectrum

Choose your annual decay rate from 60% (lose everything in 5 years) to 95% (lose everything in ~2 months). Higher burn = higher crash multipliers.

Lower Burn (60-75% annual)

  • • Lose everything in 2-5 years
  • • Crash multipliers: 10x to 13x
  • • Medium-dated puts (6-18 months)
  • • Balanced VIX exposure

Maximum Burn (85-95% annual)

  • • Lose everything in 2-6 months
  • • Crash multipliers: 15x to 19x
  • • Short-dated deep OTM puts
  • • Concentrated VIX exposure

⚠️ ALL BURN RATES LEAD TO ZERO WITHOUT A CRASH

Core Allocation

All strategies use the same institutional derivatives, with duration adjusted based on your decay rate.

50% Deep OTM S&P 500 Puts

3-36 month expiry, 25-60% below spot, depending on decay rate

30% VIX Volatility Exposure

VIX futures and call spreads, short or long-dated based on configuration

20% Credit Default Swaps

CDX IG/HY protection, 6 months to 3 years tenor

Execution & Management

General Rules

  • ✓ All hedges are long premium only (no infinite risk)
  • ✓ All exposures are non-levered and cannot go negative
  • ✓ NAV updates daily based on marked-to-market derivative values
  • ✓ All execution is handled automatically by Permabear (no user action required)
  • ✓ Positions are held off-chain with institutional counterparties

Rolling & Rebalancing

Position rolling frequency scales with your decay rate:

Low Decay (18-40%)

  • • S&P puts: Rolled every 3-6 months
  • • VIX exposure: Rolled every 2-4 months
  • • CDS protection: Rolled every 6-12 months

High Decay (60-95%)

  • • S&P puts: Rolled every 30-45 days
  • • VIX exposure: Rolled monthly
  • • CDS protection: Rolled quarterly

Ready to short the market?

Connect your wallet and choose your burn rate. Capital erosion starts immediately.

Remember: You lose everything in 5 years max without a crash.

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