๐Ÿ“ˆ Strategies

๐Ÿ“ˆ Strategies / Boosted pools

Optimize Your Earnings, Unleash the Power of Liquid Lockers

๐Ÿค” What are Strategies?

Strategies are an integral part of Stake DAO. They are designed to optimize the potential of Liquid Lockers. Each pool from the underlying protocols with a gauge can have a corresponding strategy on Stake DAO. These strategies are boosted by veTokens owned by the Liquid Locker, benefiting all users who have deposited into the corresponding strategies.

โš™๏ธ How does it work?

  • Users can deposit their LP tokens, earned from providing liquidity in underlying protocols, into a strategy. Regardless of the scenario, these LP tokens will be directed to the underlying Liquidity Gauge.
  • To save on gas costs, users have the option to deposit without making an additional deposit in the underlying protocol liquidity gauge. In this case, the next user who deposits (and this time also to the underlying gauge) will receive 0.1% of the previous depositor's balance.
  • Strategies utilize the corresponding Liquid Locker veToken balance to boost rewards.ย 
  • Users have the choice to either claim their rewards directly or to re-compound them into the Liquid Locker. This ensures that the Locker will always have a full boost.ย 
  • Strategies can also receive SDT incentives, which increases the yield.ย 

Here is a diagram to summarize how Strategies works

Boosted pools

๐ŸŒพ Harvesting

As strategies are linked to the reward contracts of underlying protocols, the rewards needs to be harvested to goes on Stake DAO gauges (and be claimed by users). Anyone can harvest these rewards, demonstrating the system's decentralized nature. Rewards are then distributed according to the fee structure, ensuring a transparent process.

โ” Missing strategies?

If a strategy is missing (i.e., there is an underlying LP pool, a Liquid Locker for that protocol, but no corresponding strategy on Stake DAO), anyone can deploy a strategy through Factories.

โš ๏ธ

Only a pool with a gauge AND a weight can be added as a strategy.

๐Ÿ“ In Summary

Step 1: Deposit

Deposit your LP tokens into a strategy. Your tokens will be directed to the underlying Liquidity Gauge, deposited via the Liquid Locker.

Step 2: Harvest (if needed)

If it's profitable, perform a harvest operation for everyone. Fees are distributed in accordance with the fee structure.

Step 3: Boost and Claim Rewards

Your deposited tokens will utilize the Liquid Locker veToken balance to boost rewards. You can choose to claim your rewards directly or re-compound them into the Liquid Locker.