# Strategies

## Overview

A **Strategy** in Satay Finance represents a structured way to deploy assets across various DeFi protocols. Each strategy interacts with a specific set of protocols, aiming to generate yield on the assets allocated by the vault.

## Strategy Base Asset and Shares

Each strategy works using a **base asset** (the asset it manages and deploys, e.g., USDC) and issues **strategy shares**. Strategy shares represent a proportional claim on the base assets deposited in the strategy.

* **Base Asset:** The fundamental asset type that the strategy handles (e.g., a stablecoin like USDC). The strategy only accepts assets compatible with this base asset.
* **Shares:** When base assets are deposited into a strategy, the depositor receives shares, which represent their claim on the assets. These shares are minted proportional to the amount of the base asset deposited.

## Managing Strategies

### Creating a Strategy

A strategy is created by the vault manager or governance. Each strategy has its own implementation address and works with a specific base asset.

* **Base Asset Compatibility:** A strategy must be compatible with the base asset of the vault. If the vault uses USDC, the strategy must also be able to handle USDC.
* **Witness:** Each strategy has a witness type that ensures valid interaction between the strategy and the vault.

### Issuing Shares

When assets are deposited into a strategy, the strategy issues **shares** to the vault. These shares represent ownership of the base assets inside the strategy.

**Equation for Issuing Shares:**

$$
\text{shares\_issued} = \frac{\text{amount\_deposited} \times \text{total\_shares}}{\text{total\_assets}}
$$

### Burning Shares

When assets are withdrawn from a strategy, the corresponding shares are **burned** (destroyed). The amount of base assets returned is proportional to the number of shares being burned.

**Equation for Burning Shares:**

$$
\text{amount\_withdrawn} = \frac{\text{shares\_burned} \times \text{total\_assets}}{\text{total\_shares}}
$$


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