Strategies

Seamless entry points to Movement DeFi

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When assets are withdrawn from a strategy, the corresponding shares are burned (destroyed).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}}