Strategy Token (ST)

Want the USDC returns from a perp DEX strategy without caring about points? ST is your token.

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What Is ST

Each epoch creates a new ST for each strategy, representing your share of the vault’s USDC value. When the epoch matures, you redeem ST for USDC based on the strategy’s final NAV. ST trades on the ST/USDC orderbook. Yield seekers buy ST at a discount to NAV during the epoch, then redeem at full NAV after maturity, capturing the spread as profit.

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Share Calculation

When you deposit USDC, you receive ST shares based on the current NAV: $\text{NAV} = \frac{\text{Total Vault Value}}{\text{Total Shares}}$ $\text{Your Shares} = \frac{\text{Deposit Amount}}{\text{NAV}}$ A small fee (varies by strategy) is deducted from your deposit before shares are calculated. This fee covers the costs of deploying capital into the strategy: exchange fees, spreads, and bridging. Example: You deposit $100 into a strategy with NAV = 1.00. After the deposit fee, you receive slightly fewer than 100 ST shares. If NAV had already risen to 1.03 (strategy up 3%), that same deposit nets you fewer shares. You are buying in at a higher price per share, but each share is backed by more USDC.

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Yield Seekers: Buy the Discount

ST typically trades below NAV on the orderbook. This discount is the yield seeker’s opportunity. The playbook:

1. Buy ST on the ST/USDC orderbook at a discount to NAV
2. Hold through maturity
3. Redeem at NAV

The discount exists because points farmers who acquire ST through minting sell it on the orderbook to recoup capital. Yield seekers absorb that supply.

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Worked Example

You paid $0.90, redeemed at NAV 1.01. The return is the discount capture ($0.10) plus the strategy’s performance ($0.01).

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Redemption

After the epoch matures, you redeem ST for USDC: $\text{USDC Received} = \text{Your Shares} \times \text{Final NAV}$ Redemption burns your ST and transfers USDC to your wallet. There is no fee on redemption.

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Selling Before Maturity

You do not have to wait for maturity. You can sell ST on the ST/USDC orderbook at any time during the epoch. This is not redemption. Another participant buys your position at the current market price. The orderbook price reflects the market’s view of the strategy’s NAV, adjusted for time remaining and demand. As the epoch approaches maturity, the orderbook price tends to converge toward NAV.

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Strategy Losses and the Discount

Negative strategy PnL is not a failure mode. It’s the inherent bet ST holders make. The discount you buy at is your buffer. Example: You buy ST on the orderbook at $0.90 (10% discount). The strategy loses 5% over the epoch. Final NAV = 0.95. You redeem at NAV 0.95, still a $0.05 profit per ST (5.6% return) because your discount absorbed the loss. You only lose money if the strategy loses more than your discount. In this example, the strategy would need to lose more than 10% before you’re underwater. That’s the trade-off: the deeper the discount you demand, the larger the loss buffer you have.

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What Drives ST Price

The ST discount reflects the cost of points. When points are in high demand, farmers sell ST more aggressively, the discount widens, and yield seekers earn a higher return. The two sides of the market, points farmers and yield seekers, set the price.