Creating Proposals
Learn how to create funding proposals to invest in talented traders.
Overview
As an investor on Atract, you can fund promising traders by creating proposals. A proposal outlines:
Capital amount you're providing
Profit-sharing terms
Risk limits (max drawdown, daily drawdown)
Duration of the deal
Once a trader accepts, a vault is created and trading begins.
Prerequisites
Connected Hyperliquid wallet with USDC balance
Identified a trader you want to fund
Understanding of risk parameters
Proposal Parameters
Capital Amount
Minimum: Typically $1,000 USDC (platform may set minimum) Maximum: No hard limit (practical limits based on liquidity)
Considerations:
Start smaller with untested traders
Scale up as track record proves out
Consider your risk tolerance
Example:
Conservative: $1,000-$5,000
Moderate: $10,000-$50,000
Aggressive: $100,000+Profit Share
Standard Range: 70/30 to 90/10 (trader/investor)
Common Splits:
80/20: Industry standard for skilled traders
70/30: For newer traders or higher risk
90/10: For proven, high-performing traders
What you get:
Your percentage of net profits
Full return of initial capital
Protection via drawdown limits
Example:
Capital: $10,000
Profit: $2,000
Your Share (20%): $400
Trader Share (80%): $1,600
Your Payout: $10,400 totalDuration
Typical Range: 7-90 days
Short Term (7-14 days):
Test new traders
Lower commitment
More frequent settlements
Medium Term (30-60 days):
Standard duration
Balance flexibility and performance tracking
Allows strategies to play out
Long Term (90+ days):
For proven traders
Better for longer-term strategies
Less frequent rebalancing
Deal Deadline: After duration expires, either party can trigger vault closure and settlement.
Max Drawdown
Definition: Maximum percentage loss from peak balance before vault auto-pauses.
Standard Range: 15-30%
Conservative (15-20%):
Tighter risk control
May limit trader's strategy
Better capital preservation
Moderate (20-25%):
Balanced approach
Gives trader room to operate
Standard for most deals
Aggressive (25-30%):
More trader flexibility
Higher risk of larger losses
For experienced traders only
Example:
Initial Capital: $10,000
Max Drawdown: 20%
Pause Trigger: $8,000
If balance drops to $8,000, vault auto-pauses.Daily Drawdown
Definition: Maximum percentage loss within any 24-hour period.
Standard Range: 5-10%
Purpose: Prevents catastrophic single-day losses.
Conservative (5%):
Tight short-term protection
May trigger false positives on volatile days
Moderate (7-8%):
Balanced daily protection
Allows for normal volatility
Aggressive (10%):
More room for trader
Higher daily risk tolerance
Example:
Start of Day: $10,000
Daily Drawdown: 5%
Pause Trigger: $9,500
If balance drops below $9,500 in one day, vault pauses.
Resets at midnight UTC.Creating a Proposal
Step 1: Navigate to Funding Page
Connect your Hyperliquid wallet
Go to Funding section
Click Create Proposal
Step 2: Select Trader
Option A: Browse Traders
View trader leaderboard/profiles
Check performance metrics (Sharpe ratio, max drawdown, win rate)
Review trading history
Option B: Direct Address
Enter trader's wallet address directly
Use if you know the trader personally
What to look for:
Consistent profitability
Reasonable drawdowns
Trading style matches your risk tolerance
Track record (longer = better)
Step 3: Configure Proposal Terms
Capital Amount:
Enter USDC amount you want to fund
Check your wallet balance
Profit Share:
Set your percentage (e.g., 20% for you, 80% for trader)
Standard is 20% investor, 80% trader
Duration:
Choose deal length in days
Consider: 30 days is standard for first-time partnerships
Risk Limits:
Max Drawdown: Set overall loss limit (e.g., 20%)
Daily Drawdown: Set daily loss limit (e.g., 5%)
Example Configuration:
Trader: 0xABC...def
Capital: $10,000 USDC
Profit Share: 20% (investor) / 80% (trader)
Duration: 30 days
Max Drawdown: 20%
Daily Drawdown: 5%Step 4: Review & Submit
Double-check:
All parameters are correct
Trader address is accurate (cannot be changed later)
You have sufficient USDC balance
Action:
Click Submit Proposal
Approve USDC spending in your wallet (one-time)
Confirm proposal creation transaction
Transaction Fees:
Network fees apply (typically minimal on Hyperliquid)
USDC is NOT transferred yet (happens on acceptance)
Step 5: Wait for Trader Response
Proposal Status: Pending
The trader can:
Accept: Vault is created, your USDC is transferred
Decline: No funds moved, proposal canceled
Ignore: Proposal remains pending (you can cancel anytime)
Notifications:
You'll be notified when trader responds
Check proposal status on Funding page
After Trader Accepts
Vault Creation
Automatic process:
Smart contract deploys TraderVault
Your USDC is transferred to the vault's Hyperliquid account
Vault is initialized with your parameters
Trading is enabled
Vault Address:
Unique contract address for this deal
Used to track trades and balance
Visible on vault dashboard
Initial State:
Balance: $10,000 (your capital)
Status: ACTIVE
Paused: false
Closed: false
Peak Balance: $10,000Monitoring Your Investment
Vault Dashboard:
Real-time balance updates (every 60 seconds via oracle)
Current drawdown percentage
Trading history (all orders)
Open positions
Profit/loss tracking
What to Monitor:
Current Balance: Is it growing?
Drawdown: How close to limits?
Trade Frequency: Is trader active?
Position Sizes: Are they reasonable?
Win Rate: Are trades profitable overall?
Red Flags:
Approaching max drawdown
Frequent losses
Huge position sizes (over-leveraging)
Inactivity (no trades for days)
Communication with Trader
Best Practices:
Discuss strategy before proposal
Set expectations upfront
Allow trader autonomy (don't micromanage)
Address concerns promptly if issues arise
When to Reach Out:
Vault approaching risk limits
Unusual trading activity
Questions about strategy
Managing Active Proposals
Canceling Pending Proposals
If trader hasn't accepted yet:
Go to Funding page
Find pending proposal
Click Cancel Proposal
Confirm cancellation
Result: Proposal removed, no funds transferred.
Modifying Proposals
Cannot modify existing proposals.
If you want different terms:
Cancel current proposal
Create new proposal with updated terms
Proposal Best Practices
Start Small
First-time partnerships:
Invest $1,000-$5,000 initially
Test the waters
Scale up on next deal if satisfied
Set Realistic Risk Limits
Too Tight (<15% max drawdown):
May trigger false pauses
Limits trader's strategy
Frustrating for both parties
Too Loose (>30% max drawdown):
High risk of significant losses
Defeats purpose of protection
Sweet Spot: 20-25% max, 5-7% daily
Match Duration to Track Record
New Trader:
7-14 days (short test period)
Lower capital
Tighter risk limits
Proven Trader:
30-60 days (standard duration)
Moderate capital
Balanced risk limits
Highly Trusted:
60-90 days (long-term partnership)
Higher capital
Comfortable risk limits
Diversify
Don't put all eggs in one basket:
Fund multiple traders
Vary risk profiles (conservative + aggressive)
Stagger durations for regular liquidity
Example Portfolio:
Trader A: $5,000 (conservative, 30 days)
Trader B: $3,000 (aggressive, 14 days)
Trader C: $2,000 (moderate, 30 days)
Total: $10,000 invested across 3 tradersUnderstanding Risks
Market Risk
Crypto markets are volatile.
Prices can drop 20%+ in a day
Black swan events happen
No guarantee of profit
Mitigation:
Set appropriate drawdown limits
Only invest what you can afford to lose
Diversify across traders
Trader Risk
Traders may:
Make poor decisions
Over-leverage
Fail to follow strategy
Mitigation:
Review track record carefully
Start with smaller amounts
Monitor trading activity
Use tight risk limits initially
Smart Contract Risk
Vaults are smart contracts.
Bugs could theoretically exist
Contracts have been audited (check audit reports)
Non-custodial (you can withdraw anytime)
Mitigation:
Contracts are tested and audited
Start small
Understand the code (if technical)
Oracle Risk
Balance sync depends on oracle.
If oracle fails, stale balance data
Trading blocked if data too old (>10 min)
Rare, but possible
Mitigation:
Oracle monitored 24/7
Automatic alerts for failures
Fail-safe blocks trades if data stale
Tax Considerations
Consult a tax professional.
Potential tax events:
Profit distributions (likely taxable as capital gains)
Vault closure (capital event)
Varies by jurisdiction
Record Keeping:
All trades logged on-chain
Download trade history from vault dashboard
Keep records for tax reporting
Common Questions
Q: Can I withdraw funds before the deal ends?
A: Only if you trigger vault closure (requires trader to close positions first). Normal withdrawals mid-deal are not supported to ensure trader can execute strategy.
Q: What if the trader loses all my capital?
A: Drawdown limits prevent total loss. Worst case: vault pauses at max drawdown (e.g., 20% loss). You'd get back $8,000 of $10,000.
Q: Can I fund multiple traders simultaneously?
A: Yes. Create separate proposals for each trader. Each gets its own vault.
Q: What if the trader ghosts me?
A: If no trades for extended period, you can close the vault after deal deadline. Inactivity alerts coming in future updates.
Q: How do I know if a trader is good?
A: Check metrics: Sharpe ratio (risk-adjusted return), max historical drawdown, win rate, trade frequency. Also consider reputation/reviews (future feature).
Next Steps
Vault Lifecycle - Full journey from proposal to payout
Profit Sharing - How payouts are calculated
Risk Management - Detailed risk controls
For Investors - Investor quick start
Related Pages
Risk Controls - Technical details on drawdown enforcement
Vault Dashboard - Monitor your active vaults
Trader Leaderboard - Browse trader profiles
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