> For the complete documentation index, see [llms.txt](https://sovavault.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sovavault.gitbook.io/docs/sova-for-users/strategies.md).

# Strategies

## Overview

Sova gives you access to a curated set of structured, professionally managed investment strategies. These are **not typical DeFi yield farms** - they mirror the characteristics of institutional funds, including portfolio construction, compliance, and redemption mechanics.

All strategies are managed off-chain by licensed asset managers (**"Yield Curators"**) and tokenized on-chain using Sova's infrastructure.

***

## Product Categories

Sova strategies fall into four initial categories, each designed with distinct goals and risk-return profiles:

### 1. Corporate Credit

Exposure to portfolios of loans and debt instruments issued by high-quality corporations.

* **Stable interest income**
* **Typically senior secured** or investment-grade debt
* **Lower volatility**, predictable yield

### 2. Bonds & Fixed Income

Capital is allocated to government bonds and investment-grade fixed income products.

* **Focused on capital preservation**
* **Duration-targeted** (e.g. short-term treasuries)
* **Ideal for conservative** yield-seeking investors

### 3. Lending & Credit Strategies

Funds are deployed to qualified borrowers under structured, collateralized terms.

* **On-chain or off-chain** borrowers
* **Yield sourced** from interest payments
* **May include** invoice factoring, trade finance, or fintech receivables

### 4. Actively Traded Strategies

Actively managed multi-asset portfolios aiming to outperform traditional benchmarks.

* **Discretionary or algorithmic**
* **May include** ETFs, volatility strategies, or macro overlays
* **Higher risk**, higher return potential

***

## Vault Structure & Mechanics

Each product is deployed as a **vault** - a smart contract that manages deposits, allocations, and redemptions. Vaults are **ERC4626-compliant** and follow the same core lifecycle:

### Vault Lifecycle

#### 1. Deposit

Deposit **USDC** or **BTC** into a vault

#### 2. Token Issuance

Vault issues **tRWA tokens** to the investor

#### 3. Strategy Deployment

Funds are deployed off-chain into the strategy

#### 4. Performance Updates

**NAV updates** reflect investment performance

#### 5. Redemption

Redemptions return the updated value in crypto

### Vault Parameters

Vaults are structured with capital efficiency, compliance, and redemption flexibility in mind. They may enforce:

* **Capital lock-up periods** (e.g. 30, 60, 90 days)
* **Redemption windows** or gating mechanisms
* **NAV update cycles** (daily, weekly, or monthly)

***

## Managed by Yield Curators

All Sova strategies are operated by regulated asset managers - what we call **Yield Curators**. These curators:

* **Manage underlying** portfolio construction
* **Provide regular** NAV reporting and asset audits
* **Operate under contractual** compliance with Sova

✅ **Are KYC'd, licensed**, and regularly reviewed

> 🔍 **Rigorous Vetting Process**
>
> Sova vets and onboards these managers under strict criteria, including jurisdictional licensing, operational history, and fund audit transparency.

***

## Vault Selection Guide

| **Vault Name**     | **Strategy Type**    | **Target APY** | **Lock-Up** | **Redemption Frequency** |
| ------------------ | -------------------- | -------------- | ----------- | ------------------------ |
| **Credit Vault**   | Corporate Credit     | **7.0%**       | 30 days     | Monthly                  |
| **Treasury Vault** | Bonds & Fixed Income | **5.5%**       | 15 days     | Bi-weekly                |
| **Lending Vault**  | Lending Strategies   | **9.2%**       | 45 days     | Monthly                  |
| **Alpha Vault**    | Actively Traded      | **12.0%**      | 60 days     | Quarterly                |

> ⚠️ **Important Disclaimer**
>
> *Actual vault APYs and terms may vary based on underlying performance and market conditions.*