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Strategy Types

Current Phase: Shadow Mainnet Testing

Multyr contracts are deployed on Arbitrum One. The system is currently in validation phase. Deposits are not open to the public. Behavior described on this page reflects the protocol's designed behavior; some mechanisms are active in shadow testing, others become active at public launch. See the Status page for details.

Multyr strategies define how capital is deployed into specific types of DeFi opportunities.

Each strategy represents a distinct allocation logic with its own behavior, constraints, and risk profile.

Overview​

Strategies in Multyr are modular and may:

  • allocate capital across one or more underlying protocols
  • rebalance internally over time
  • operate under predefined constraints

Strategies do not operate independently — they are integrated into the system's allocation and risk framework.

Example: USDC Lending Strategy​

The USDC Lending Strategy is a single-strategy vault designed to allocate capital across multiple lending protocols.

Objective​

The strategy deploys USDC across lending markets while balancing:

  • yield
  • liquidity
  • risk exposure

Underlying Protocols​

The strategy may allocate capital across multiple lending protocols, including:

  • Aave
  • Euler
  • Morpho
  • Compound
  • Venus
  • other supported lending markets

Each protocol is accessed through an adapter layer.

Allocation Model​

Capital is not deployed into a single protocol.

Instead, the strategy:

  • distributes capital across multiple lending venues
  • adjusts exposure over time
  • respects allocation limits and system constraints

Adapter Allocation and Rebalancing​

Within the strategy, capital is dynamically allocated across adapters.

Observation Layer​

The system periodically evaluates each adapter using on-chain and cached data.

This may include:

  • yield conditions
  • available liquidity
  • withdrawable capacity
  • external market signals

Some inputs are smoothed over time to reduce sensitivity to short-term fluctuations.

Scoring Model​

Each adapter is assigned a relative score based on multiple factors.

These may include:

  • yield characteristics
  • liquidity conditions
  • risk profile
  • stability of returns
  • incentive dynamics

Scores are used to determine target allocation weights.

Stability Consideration​

The system incorporates measures of return stability over time.

Adapters with highly volatile yield may receive lower allocation compared to more stable alternatives, even when short-term yield is higher.

This reduces unnecessary reallocations and limits sensitivity to transient market conditions.

Target Allocation​

Capital is distributed proportionally based on relative scoring.

Allocation is subject to constraints, including:

  • maximum exposure per adapter
  • liquidity availability
  • system-wide limits

Rebalance Gating​

Rebalancing is not triggered by every change in conditions.

Before execution, the system evaluates whether reallocation is economically justified.

This includes:

  • estimating expected benefit from reallocation
  • accounting for execution costs

Rebalancing is performed only when the expected benefit meaningfully exceeds the cost.

Execution Constraints​

Rebalancing is further constrained by:

  • minimum movement thresholds
  • cooldown periods between rebalances
  • limits on execution size and frequency

These constraints reduce unnecessary churn and operational overhead.

Execution Flow​

Rebalancing generally follows a staged process:

  1. reduce exposure from over-allocated adapters
  2. increase exposure to under-allocated adapters

Execution may occur across multiple steps and depends on system conditions.

Anti-Churn Mechanisms​

Multiple mechanisms reduce excessive rebalancing:

  • stability-adjusted scoring reduces sensitivity to short-term changes
  • cost-based gating filters economically inefficient moves

Both conditions must be satisfied for rebalancing to occur.

Resulting Behavior​

As a result:

  • capital is not continuously reallocated
  • short-term yield spikes do not trigger immediate shifts
  • allocation evolves gradually over time
  • execution costs are explicitly considered

Liquidity Characteristics​

Capital deployed in lending protocols may have different liquidity profiles:

  • some positions are highly liquid
  • others may require time to unwind
  • liquidity depends on market conditions

This directly impacts withdrawal behavior.

Risk Considerations​

The strategy is exposed to risks associated with underlying lending protocols, including:

  • smart contract risk
  • liquidity risk
  • interest rate volatility
  • protocol-specific risks

Losses in underlying protocols are reflected in vault NAV.

Strategy Behavior in the System​

Strategies operate within a multi-layer system:

  • at the system level, capital is allocated across strategies
  • at the strategy level, capital is allocated across protocols

Both layers operate under constraints and predefined rules.

Important Considerations​

  • strategies are rule-based, not discretionary
  • allocation is dynamic but constrained
  • not all market opportunities are acted upon
  • underlying protocols introduce external risk

Multyr does not guarantee returns or capital preservation.