> For the complete documentation index, see [llms.txt](https://docs.troves.fi/p/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.troves.fi/p/strategies/sensei-delta-neutral-lending.md).

# Sensei - Delta neutral Lending

## What is Sensei - Delta Neutral Lending ?

There are 4 strategies available in delta neutral strategy:

* STRK Sensei 
* USDC Sensei 
* ETH Sensei
* xSTRK Sensei

Deposit your STRK/ USDC/ ETH to automatically loop your funds between zkLend and Nostra to create a delta neutral position. This strategy is designed to maximize your yield on USDC/ STRK/ ETH. Your position is automatically adjusted periodically to maintain a healthy health factor. You receive a NFT as representation for your stake on Troves. You can withdraw anytime by redeeming your NFT for USDC or STRK or ETH. For upto 2 weeks, your position value may reduce due to high borrow APR. This will be compensated by STRK rewards.

For xSTRK Sensei, we use Vesu and Re7's pools respectively.

## Why?

Using the Sensei strategy in Troves offers several benefits:

* **Expertly Curated Strategies**: Sensei Strats are designed by experienced DeFi strategists, ensuring optimal asset allocation and yield optimization.
* **Diversification**: These strategies often include a mix of assets and protocols, reducing risk through diversification.
* **Automatic Risk Management**: health of the contracts are monitored in real time and automatically rebalanced, allowing for a hands-off investment approach.
* **Enhanced Returns**: By leveraging advanced strategies and automated compounding, Sensei Strats aim to maximize your returns efficiently.

## Technical details:

#### Contract style - ERC721 

#### Technical flow of funds

Assuming you deposit $1000 worth of STRK to STRK sensei, initially your tokens will be deposited to zkLend supply. Based on the $1000 deposit in ZkLend, a borrow will be taken equivalent to $384.21 of ETH which is calculated such that we maintain a target health factor (e.g. 1.3) overall from ZkLend which will be deposited to Nostra Money Markets' ETH supply. Furthermore, approximately $189.149 of STRK is borrowed from Nostra Money Markets corresponding to the $381.21 of ETH supplied which is again calculated such that we maintain a target health factor. The same process of depositing STRK starts from the beginning by depositing Nostra's borrow to ZkLend supply and the whole process is repeated 3 more times.

In conclusion, 4 steps of borrows of supply and borrow are taken which compounds the overall interest of user's deposit to a higher TVL. Furthermore, every 2 weeks, the strategy deposits your STRK rewards to ZkLend which appreciates your interest even more.

#### Risk management

TBD