Permissionless Vaults

Orion Finance is fully permissionless, meaning anyone can create, manage, and invest in vaults without requiring approval or whitelisting.

This open design ensures that portfolio management is decentralized and composable, enabling broader innovation and capital efficiency in DeFi.

Why Permissionless Matters

Traditional asset management platforms allow only approved teams and entities to deploy investment strategies and build auditable, out-of-sample track records. This:

• Limits innovation to pre-approved participants;
• Reduces accessibility for non-institutional users;
• Creates inefficiencies in strategy discovery and execution.

Orion takes a radically different approach, where anyone can create and customize vaults.

This model:

• Encourages competition – The best vaults attract deposits based on performance, not exclusivity;
• Removes barriers to entry – No need for approval to launch a portfolio strategy;
• Expands composability – Vaults can integrate freely with other protocols.

Feature	Traditional Asset Management	Orion Permissionless Vaults
Access	Restricted (only approved managers)	Open to anyone
Transparency	Limited (offchain reporting)	Fully onchain and verifiable
Execution Costs	High fees and centralized costs	Gas-efficient orchestration and automation

How Permissionless Vaults Work

Orion vaults follow the ERC-4626 standard, making them interoperable, composable, and extendable.

1. Anyone Can Deploy a Vault

   • No whitelisting or permission required.
   • Vault creators define strategy parameters, risk levels, and assets.

2. Open Strategy Execution

   • Strategies can be hardcoded, algorithmic, or dynamically managed.
   • Performance data is transparent and verifiable onchain.

3. Composability and Integration

   • Vaults can be used as collateral, stacked together, or wrapped into structured products.

Quantitative Vault Assessment

Vaults on Orion are evaluated only by their performance and its statistical reliability: being a truly permissionless environment, no gatekeepers can discretionarly whitelist strategies. All Orion vaults are evaluated and ranked by the same metrics, ensuring a level playing field in which the best strategies can thrive.

We note that live strategies may have:

• Very short track records,
• High return volatility,
• Non-Gaussian return distributions,

To this end, Orion introduces a robust evaluation framework based on the Probabilistic Sharpe Ratio (PSR)¹. In the context of Orion vaults, PSR can be used to:

• Score and rank vaults not just by raw performance, but by the confidence level in their outperformance.
• Provide a robust and statistically valid filter against noisy or overfit strategies.
• Help investors differentiate luck from skill, especially in early-stage vaults.

Footnotes

1. Bailey, D. H., & López de Prado, M. (2012). The Sharpe Ratio Efficient Frontier. Journal of Risk, Vol. 15, No. 2, Winter 2012. ↩