The Evolution of UltraX

Navigating the Recent Market Impact and the Evolution of UltraX

To our Vectis Finance community,

The past month has been exceptionally challenging for both our users and the broader market. The recent security incident involving the Drift Protocol in April, which saw a staggering $280 million affected, has had a profound impact across the ecosystem.

We want to be completely transparent: this event significantly impacted UltraX, as approximately 30% of our vault’s equity was deposited on the Drift platform. We understand the distress and frustration this causes. Please know that we are actively communicating with the Drift team to track their recovery progress, and we will continuously update you as we receive more information.

Despite this setback, our commitment to delivering robust and secure yields remains unchanged. Today, we want to share our roadmap forward and introduce the optimized, next-generation version of UltraX.

Why We Still Believe in Funding Rate Arbitrage

While the recent events tested our infrastructure, the core mechanics of our strategy remain fundamentally sound. We strongly believe that funding rate arbitrage continues to offer immense potential for our users. Here is why:

• Pricing inefficiencies: We consistently observe inefficient funding rate pricing across different exchanges, creating reliable arbitrage opportunities.
• Expansion of TradFi pairs: A growing number of Traditional Finance (TradFi) trading pairs are continuously launching on major exchanges, expanding our operational playground.
• Historical resilience: Looking at historical data, the returns for this specific class of market-neutral strategy are showing a clear upward trend.

UltraX Upgrades: Enhanced Security & Return Optimization

In response to the current market environment and the lessons learned, we have overhauled our architecture to prioritize both maximum security and optimized yields. We recently completed rigorous testing of our new risk control measures in partnership with Ranger.

1. Fortified risk control

Protecting your assets is our highest priority. We have implemented several strict structural changes:

• Upgraded security mechanisms: We have enhanced our multi-sig protocols and implemented strict time lock features for operational execution.
• Diversified custody: Alongside Cobo, we are integrating Binance into our operations, utilizing Ceffu for institutional-grade security and custody.
• Strict exposure limits: To prevent isolated platform risks, any exchange outside of our primary tier (Binance and Hyperliquid) will now have a strict maximum exposure limit of 5% of the total UltraX vault.

2. Return optimization

Moving forward, our liquidity and operational focus will be heavily concentrated on two primary platforms: Hyperliquid and Binance.

Because these two platforms offer superior financial yields and liquidity, they are exempt from the 5% exposure cap. We are particularly excited about integrating Binance into our primary arbitrage exchange portfolio. Our recent live testing shows that TradFi products on Binance offer substantial profit margins and high operability.

Note: Due to our new risk parameters, our operations on Aster, Boros, and Lighter will be heavily restricted going forward.

Fee structure and relief for affected users

The standard fee structure for UltraX will remain unchanged. However, we recognize the financial strain the Drift incident has placed on our community.

As a gesture of our commitment to you, we will fully refund all intermediate fees generated from now until 31 May 2026, for users directly affected by the incident.

Standard fee schedule

The fee rebate will be processed for affected users at the end of the relief period.

We are deeply grateful for your continued trust and patience as we navigate this recovery process together. Vectis Finance was built to adapt, and with these new optimizations to UltraX, we are building a more resilient, secure, and profitable future for our community.

If you have any questions, our support team is available around the clock.

Sincerely,

The Vectis Finance Team