How does Troves generate yield?
Short answer:
It depends.
Each Trove (vault/strategy) is independently designed with its own yield logic, risk model, and capital flow.
Strategy Design Philosophy
Troves generate yield by:
Combining multiple protocols on Starknet
Optimizing capital efficiency
Managing risks (especially liquidation risk)
Harvesting and compounding rewards
Actively maintaining healthy positions
A strategy may include:
Lending & borrowing loops
Liquidity provisioning
Liquid staking integrations
Reward farming
Structured leverage
Automated rebalancing
Each vault has a defined methodology — not a black box.
Vault Shares & Yield Accrual
Depending on the vault type:
Users deposit assets
The vault may mint an ERC20 share token representing their proportional ownership
As yield accrues, the vault’s underlying assets grow
The share price increases over time
You don’t receive yield as separate payouts — instead:
Your shares become redeemable for a larger amount of underlying assets.
When you redeem later, you withdraw more than you initially deposited (assuming positive yield and no losses).
Risk Management
Yield doesn’t exist without risk.
Troves actively manages:
Liquidation risk (for leveraged strategies)
sudden increase in borrowing APYs
retired external protocols/pools
Liquidity risk
Slippage handling
Each strategy clearly defines its risk model and operational boundaries.
Radical Transparency
Troves prioritizes transparency.
For every strategy page, users can access:
Methodology (how yield is generated)
Historical APY performance
Risk disclosures
Redemption mechanics
Current vault holdings
Audit information
Access control details
Nothing is hidden.
Users can verify positions, understand flows, and assess risk before depositing.
Summary
Troves generates yield by:
Designing purpose-built strategies on Starknet, optimizing capital efficiency, managing risk dynamically, and transparently exposing every operational detail to users.
Each vault is different. Each yield source is documented. Each risk is disclosed.
Yield is engineered — not assumed.
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