This page explains how strategies integrate with Vaults and how capital is allocated, managed, and withdrawn.
A Strategy is a contract responsible for generating yield using Vault assets.
Each strategy:
Accepts assets from the Vault
Deploys them according to its own logic
Reports balances and performance back to the Vault
Strategies are designed to be independent and reusable. A single strategy may be connected to multiple Vaults, depending on configuration.
From the Vault’s perspective, a strategy must be able to:
Receive assets
Return assets on request (subject to liquidity constraints)
Accurately report its current balance
Reflect gains or losses over time
How the strategy achieves this is intentionally left abstract at the Vault level.
Vaults allocate capital to strategies based on configuration parameters.
These may include:
Maximum allocation limits
Strategy capacity
Liquidity characteristics
Risk considerations
A Vault may:
Use a single strategy
Distribute capital across multiple strategies
Adjust allocations over time
The allocation logic can evolve without changing the Vault interface.
Strategies typically follow a defined lifecycle:
Deployment
Registration with the system
Activation for allocation
Ongoing operation and reporting
Allocation reduction or pause
Removal, if necessary
This lifecycle allows strategies to be managed safely without forcing users to exit the Vault.
Strategies may generate:
Positive yield
No yield
Temporary or permanent losses
All outcomes are reflected at the Vault level through changes in total assets.
Vault Shares automatically adjust in value to reflect strategy performance, without requiring user action.
It is important to clearly define what the Vault does and does not guarantee.
Vaults do not guarantee principal
Vaults do not guarantee yield
Strategy risk is borne collectively by Vault participants
The modular design allows risk to be managed, but not eliminated.
This strategy framework enables:
Incremental addition of new strategies
Experimentation without disrupting users
Clear separation between infrastructure and execution
Long-term scalability of the Vault system
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