Aggregator Vaults

Description

One way to address the risk management of yield-bearing assets is through aggregation. Aggregator Vaults aggregate the single-strategies into risk-tranched vaults, such as a USDC vault with senior and junior tranches where the junior tranches assume additional risk in return for a potentially larger share of the yields. This aggregation process leverages DeFi's composability to create more yield-generating opportunities for these asset types.

Architecture

Aggregator vaults can aggregate both Single Strategies (SCYVaults) and other Aggregator vaults. They are loosely based on EIP4626 vault standard but use a two-step withdrawal process for added security and flexibility.

Vault Hierarchy

How it works

Users deposit underlying assets into a respective vault. The risk model determines the highest-yielding allocations for each risk tranche, and the vault automatically deploys capital to the appropriate strategies on a particular chain. All profits are converted to underlying and auto-compounded by depositing the funds into the strategy. Withdrawals happen via a two-step process to prevent vault token price manipulation.