> ## Documentation Index
> Fetch the complete documentation index at: https://docs-staging.centuari.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Vault Strategies

> Understanding different vault strategy types and their risk/return profiles

<Warning>
  **Coming Soon** - Mutual Fund Vaults is an upcoming feature. Further details will be available when it launches.
</Warning>

## Overview

Vaults deploy capital according to defined strategies. Each strategy has different return targets, risk profiles, and underlying allocations.

## Strategy Types

### 1. Fixed Rate Focus

**Objective**: Maximize fixed-rate yield with minimal variable exposure

```
Allocation:
├── Centuari Fixed Rate: 90-100%
│   ├── 30-day maturities: 30%
│   ├── 60-day maturities: 35%
│   └── 90-day maturities: 35%
└── Cash Buffer: 0-10%
```

<CardGroup cols={2}>
  <Card title="Target APY" icon="percent">
    6-10%
  </Card>

  <Card title="Risk Level" icon="shield">
    Low
  </Card>
</CardGroup>

**Best For**:

* Conservative investors
* Those wanting predictable returns
* First-time vault users

**How It Works**:

1. Curator places lend orders across multiple maturities
2. Maturity laddering provides regular liquidity events
3. Auto-rollover maintains continuous deployment
4. Cash buffer handles withdrawal requests

***

### 2. Yield Optimized

**Objective**: Maximize absolute yield across DeFi

```
Allocation:
├── Centuari Fixed Rate: 30-50%
├── Aave/Compound: 20-30%
├── Pendle Fixed Yield: 15-25%
├── Other Yield Sources: 10-20%
└── Cash Buffer: 5-10%
```

<CardGroup cols={2}>
  <Card title="Target APY" icon="percent">
    8-15%
  </Card>

  <Card title="Risk Level" icon="shield">
    Medium
  </Card>
</CardGroup>

**Best For**:

* Yield-seeking investors
* Those comfortable with multi-protocol exposure
* Experienced DeFi users

**How It Works**:

1. Curator monitors rates across protocols
2. Rebalances to highest-yielding opportunities
3. Hedges variable rate exposure when advantageous
4. Maintains diversification limits per protocol

***

### 3. RWA Enhanced

**Objective**: Blend DeFi and TradFi yields

```
Allocation:
├── Centuari Fixed Rate: 40-50%
├── Tokenized Treasuries: 25-35%
├── RWA Collateral Lending: 15-25%
└── Cash Buffer: 5-10%
```

<CardGroup cols={2}>
  <Card title="Target APY" icon="percent">
    7-12%
  </Card>

  <Card title="Risk Level" icon="shield">
    Low-Medium
  </Card>
</CardGroup>

**Best For**:

* Institutions
* Those wanting TradFi correlation
* Risk-adjusted return seekers

**How It Works**:

1. Core allocation to Centuari fixed-rate
2. Supplemental yield from tokenized T-bills
3. Premium yields from RWA-collateralized loans
4. Natural hedge between DeFi and TradFi rates

***

### 4. Delta Neutral

**Objective**: Generate yield while hedging directional risk

```
Allocation:
├── Centuari Lending: 40-50%
├── Basis Trade (Long spot, short perp): 30-40%
├── Options Premium: 10-20%
└── Cash Buffer: 5-10%
```

<CardGroup cols={2}>
  <Card title="Target APY" icon="percent">
    10-20%
  </Card>

  <Card title="Risk Level" icon="shield">
    Medium-High
  </Card>
</CardGroup>

**Best For**:

* Sophisticated investors
* Those wanting uncorrelated returns
* Market-neutral seekers

**How It Works**:

1. Lend stablecoins on Centuari for base yield
2. Capture funding rates via basis trades
3. Sell covered options for premium
4. Hedged positions reduce directional exposure

***

### 5. Multi-Currency

**Objective**: Optimize across currency markets

```
Allocation:
├── USD Lending: 50-60%
├── EUR Lending: 20-30%
├── JPY Lending: 10-20%
└── Cash Buffer: 5-10%
```

<CardGroup cols={2}>
  <Card title="Target APY" icon="percent">
    7-12%
  </Card>

  <Card title="Risk Level" icon="shield">
    Medium (FX risk)
  </Card>
</CardGroup>

**Best For**:

* Global investors
* Those comfortable with FX exposure
* Seeking cross-currency arbitrage

**How It Works**:

1. Identify rate differentials across currencies
2. Allocate to highest-yielding markets
3. May hedge FX or leave exposed
4. Rebalance as rate differentials shift

## Strategy Comparison

| Strategy         | Target APY | Risk     | Complexity | Best For         |
| ---------------- | ---------- | -------- | ---------- | ---------------- |
| Fixed Rate Focus | 6-10%      | Low      | Simple     | Conservative     |
| Yield Optimized  | 8-15%      | Medium   | Moderate   | Yield seekers    |
| RWA Enhanced     | 7-12%      | Low-Med  | Moderate   | Institutions     |
| Delta Neutral    | 10-20%     | Med-High | Complex    | Sophisticated    |
| Multi-Currency   | 7-12%      | Medium   | Moderate   | Global investors |

## Rebalancing Rules

Each strategy has defined rebalancing triggers:

### Time-Based

* **Daily**: Check allocation drift
* **Weekly**: Full rebalance if >5% drift
* **At Maturity**: Redeploy maturing positions

### Event-Based

* **Rate Change**: Significant market rate movement
* **Liquidity Need**: Withdrawal queue builds
* **Risk Threshold**: Position exceeds concentration limit

### Example: Fixed Rate Focus Rebalancing

```
Current State:
  30-day positions: 45% (target: 30%)
  60-day positions: 25% (target: 35%)
  90-day positions: 25% (target: 35%)
  Cash: 5%

Trigger: 30-day allocation >5% above target

Action:
  1. Allow 30-day positions to mature (don't roll)
  2. Deploy maturing funds to 60/90-day
  3. Restore target allocation over 2 weeks
```

## Performance Benchmarks

Each strategy is measured against relevant benchmarks:

| Strategy         | Benchmark                 | Target Outperformance |
| ---------------- | ------------------------- | --------------------- |
| Fixed Rate Focus | Centuari avg fixed rate   | +50bps                |
| Yield Optimized  | DeFi Llama stablecoin avg | +200bps               |
| RWA Enhanced     | 10Y Treasury + 300bps     | +100bps               |
| Delta Neutral    | Risk-free rate + 500bps   | +200bps               |

## Risk Management

### Concentration Limits

| Limit Type      | Fixed Rate | Yield Opt | RWA Enhanced |
| --------------- | ---------- | --------- | ------------ |
| Single Position | 20%        | 15%       | 15%          |
| Single Protocol | 100%       | 40%       | 50%          |
| Single Maturity | 40%        | 30%       | 30%          |
| Single Asset    | 100%       | 50%       | 60%          |

### Liquidity Requirements

| Strategy         | Min Cash Buffer | Max Deployment |
| ---------------- | --------------- | -------------- |
| Fixed Rate Focus | 5%              | 95%            |
| Yield Optimized  | 10%             | 90%            |
| RWA Enhanced     | 10%             | 90%            |
| Delta Neutral    | 15%             | 85%            |

### Drawdown Limits

If vault experiences significant losses:

| Drawdown | Action                                |
| -------- | ------------------------------------- |
| 2%       | Alert curator                         |
| 5%       | Reduce risk, review strategy          |
| 10%      | Pause new deposits, governance review |

## Selecting a Strategy

<Steps>
  <Step title="Assess Risk Tolerance">
    * Low: Fixed Rate Focus
    * Medium: Yield Optimized, RWA Enhanced
    * Higher: Delta Neutral
  </Step>

  <Step title="Define Return Expectations">
    * 6-8%: Fixed Rate Focus
    * 8-12%: RWA Enhanced, Multi-Currency
    * 12%+: Yield Optimized, Delta Neutral
  </Step>

  <Step title="Consider Time Horizon">
    * Short (\<3 months): Higher cash buffer preferred
    * Medium (3-12 months): Standard strategies
    * Long (>1 year): Can tolerate longer maturities
  </Step>

  <Step title="Review Curator Track Record">
    * Historical performance
    * Risk-adjusted returns (Sharpe)
    * Drawdown history
  </Step>
</Steps>

<Card title="Browse Vaults" icon="grid" href="https://app-staging.centuari.finance/vaults">
  Find a vault matching your strategy preference
</Card>