💿Strategy Framework and Allocation Model
How strategies plug into vaults, and how capital and liquidity move
A strategy is a contract that generates yield with vault assets. It accepts capital from the vault, deploys it according to its own logic, and reports balances and performance back. Strategies are independent and reusable — one strategy can serve multiple vaults.
From the vault's perspective, every strategy must be able to receive assets, return them on request (subject to liquidity), report its current balance accurately, and reflect gains or losses over time. How it achieves that is deliberately abstract at the vault level.
Allocation
Vaults allocate capital to strategies based on configuration — allocation limits, strategy capacity, liquidity characteristics, and risk considerations. A vault may run a single strategy or split capital across several, and allocations can change over time without altering the vault interface. The current split is visible in the app's Strategies tab, including any unallocated balance awaiting deployment.
Both current vaults run a single lending strategy at 100% target allocation — see Available Vaults and Strategies.
Strategy lifecycle
Strategies move through a managed lifecycle: deployment → registration → activation → ongoing operation and reporting → allocation reduction or pause → removal if necessary. Because the vault interface never changes, none of these steps require you to migrate or exit.
Each strategy periodically reports its gains or losses to the vault — the app shows the time of the last report. Reporting is when the strategy performance fee is charged and when the price per share updates to reflect performance.
Liquidity and withdrawals
A strategy keeps part of its capital deployed in yield-generating positions, so instant liquidity can be lower than total assets. When you withdraw, the vault first uses idle balances, then frees capital from the strategy. Under normal conditions this is seamless. In stressed conditions — when deployed positions cannot be unwound against the live order book — the withdrawal transaction reverts rather than executing at a distorted price: no funds move and your position stays in the vault. You can try a smaller amount, or try again once liquidity recovers. Withdrawal availability is therefore not guaranteed at any given moment.
Risk is shared, not eliminated. Vaults guarantee neither principal nor yield — a strategy can gain, earn nothing, or lose, and every outcome flows through to the price per share, borne collectively by the vault's participants.
Related
Vault System Overview — the accounting model strategies report into
Available Vaults and Strategies — live strategies and their specifics
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