Yield Strategy

Overview

All deposited capital is routed to a yield strategy. Capital is not intended to sit idle. Yield is used to fund:

• Platform fee flow
• Project ecosystem budget
• Project buyback/burn allocation

Default strategy at launch is Aave V3 supply-side deployment. Projects can bring custom strategies if they satisfy interface requirements.

Aave V3 (Default)

Deposited collateral is supplied to Aave V3 pools. Strategy behavior is intentionally simple at launch:

• Supply-side only
• No leverage loops
• No complex directional strategy behavior

Why Aave at launch

• High integration maturity
• Deep liquidity in supported assets
• Battle-tested production history
• Compatible with launch assets (USDC, USDT, WETH, wBTC)

How yield is tracked

Conceptually:

yield = strategy value of capital - principal

In current contracts:

• AaveStrategy.valueOfCapital() reads aToken balance
• AaveStrategy.yield() is valueOfCapital - totalSupply (floored at 0)

Typical APY ranges (variable, not guaranteed)

Asset	APY Range
USDC / USDT	2-8%
WETH	0.5-3%
wBTC	0.1-1.5%

Rates are variable and market-dependent.

Yield Flow

Deposited capital -> Strategy
Strategy accrues yield
Yield claim called
Platform fee extracted
Remainder to project treasury routing

Project-side routing is configured by project policy (ecosystem budget versus buyback/burn allocation).

Claiming is permissionless. Cadence is operationally flexible (for example daily/weekly/threshold-driven).

Custom Strategies

Projects can deploy custom strategy contracts if they implement required interfaces (deposit, withdraw, capital reporting, yield claim behavior).

Possible examples:

• Morpho
• Ethena sUSDe
• Lido stETH
• Maker sDAI
• Project-native strategy modules

Risk ownership

Custom strategy risk is borne by that raise context. The platform does not automatically endorse third-party strategies beyond compatibility.

Investors should be able to inspect strategy selection before deposit.

Diversification Rules (Draft)

Initial policy direction:

• Start with Aave-only as default path
• Add additional strategies incrementally after risk review
• Keep isolation per raise/per collateral pool
• Avoid global shared risk pools for unrelated projects

Risk Model

Yield goes to zero

Impact:

• Principal mechanics still function
• Buyback and ecosystem budget inflow slows
• No guaranteed minimum yield

Upstream liquidity crunch

If strategy liquidity is temporarily tight (for example high Aave utilization):

• Immediate withdrawals can be constrained
• Wrapper availability checks may reduce executable amount
• Exits may require retries over time

Smart-contract exploit in strategy stack

If strategy capital is lost, backing collateral decreases and exit values settle against what remains.

Principal-protection mechanics protect against project-token downside, not against upstream protocol exploits that reduce reserve collateral itself.

Circuit-breaker interaction

Outflow throttling can be activated through circuit-breaker checks in wrapper withdraw paths to limit exploit velocity and flash-driven drains.

Operational Controls

At wrapper/strategy layer, control functions include:

• Add/remove/reorder strategies
• Deploy and force-withdraw strategy allocations
• Set/rotate yield claimer roles
• Set circuit breaker reference

This supports conservative launch posture and controlled expansion.