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What ST Does For You

ST is your claim on the strategy’s USDC returns at maturity. Deposit USDC, receive ST shares. Hold them, sell them on the AMM, or redeem them when the epoch finalizes. ST is an ERC4626-like vault share. Each epoch creates a new ST contract instance, e.g., ST-PacificaFundingArb-E007 for Epoch 7. Think of it as a share in a closed-end fund.

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How Shares Are Calculated

The number of ST shares you receive depends on the current NAV (net asset value) at deposit time: shares=netUSDC×totalSharescurrentNAV\text{shares} = \frac{\text{netUSDC} \times \text{totalShares}}{\text{currentNAV}} First depositor: If you’re first in a new epoch, the bootstrap rule applies: shares = netUSDC (1:1 ratio). Example: Two depositors at different NAVs
Alice (Day 1)Bob (Week 4)
Deposits$100$100
Deposit fee (0.5%)$0.50$0.50
Net USDC$99.50$99.50
NAV at deposit$10,000$10,300 (strategy up 3%)
Total shares before10,00010,099.50
Shares received99.50 × 10,000 / 10,000 = 99.5099.50 × 10,099.50 / 10,300 = 97.58
Alice gets 99.50 shares. Bob gets 97.58, fewer because the strategy has appreciated. Bob is buying in at a higher price per share. This is exactly how a mutual fund works.
No. ST floors at $0. The strategy’s deposited capital is the margin, and there’s no additional leverage. Your maximum loss is the USDC you deposited.

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Share Price and NAV

sharePrice=currentNAVtotalShares\text{sharePrice} = \frac{\text{currentNAV}}{\text{totalShares}} The ArcX AMM price typically tracks slightly below NAV (reflecting the ST discount from flash loop selling pressure), then converges toward NAV as maturity approaches via the time-decay curve. For the full price trajectory chart and analysis, see EPT Pricing: ST Price Through the Epoch. The NAV oracle updates every 5 minutes. As the strategy executes trades on perp DEXes, PnL flows into the NAV:
  • Strategy earns funding payments → NAV increases → share price rises
  • Strategy takes a loss → NAV decreases → share price falls
  • Strategy is idle → NAV stays flat
The floor: ST share price floors at $0. If the strategy loses its entire capital, your ST redeems for nothing. But it never goes negative. You cannot owe more than your deposit.

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Redemption

Once the epoch ends and the admin calls finalize(), you can redeem: usdcOut=yourShares×finalNAVtotalShares\text{usdcOut} = \frac{\text{yourShares} \times \text{finalNAV}}{\text{totalShares}}
  • No fee on ST redemption
  • No expiry: redeem days, weeks, or months after finalization
  • Burns your ST shares and transfers USDC to your wallet
Example: Alice deposits $100 (sole depositor). Fee = $0.50. Net = $99.50. Shares = 99.50. Strategy earns 3%. Final NAV = $102.49. usdcOut=99.50×102.4999.50=$102.49\text{usdcOut} = \frac{99.50 \times 102.49}{99.50} = \$102.49 Net profit = $1.99 after the $0.50 fee.
It remains redeemable indefinitely after finalization. No expiry. Your USDC isn’t forfeited.

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Early Exit: Selling on the ArcX AMM

Before finalization, the only way to exit is selling ST on the ArcX AMM’s ST/USDC pool. This is a custom Pendle-style AMM with a time-decay curve that accounts for the time remaining until maturity.
  • ST below fair value: Arbitrageurs buy (price corrects upward)
  • ST above fair value: Arbitrageurs sell (price corrects downward)
The time-decay curve steepens as maturity approaches, naturally pulling ST toward its redemption value. ST prices stay close to NAV during the epoch, with tighter spreads as finalization nears. The discount narrows as maturity approaches. Less time for things to go wrong. Early yield seekers benefit most: they bought at a deeper discount and locked in a wider gap between purchase price and redemption value. Yield seeker worked example: A yield seeker buys ST at 0.90whenthestrategyearns10.90 when the strategy earns 1% over the epoch. At maturity, each ST is worth ~1.01. That’s an 11% return in one epoch --- the 10% discount capture plus the 1% strategy performance.

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What Drives ST Price

FactorEffectMechanism
Strategy performance (PnL)↑ PnL → ↑ ST priceNAV oracle updates every 5 min
Flash loop selling pressure↓ ST pricePoints farmers sell ST repeatedly to accumulate EPT
Yield seeker demand↑ ST priceYield seekers buy discounted ST for fixed APR
Time to maturityConverges to final NAVArcX AMM time-decay curve steepens near maturity
The two-sided market: Points farmers sell ST at a discount (creating supply), yield seekers buy discounted ST (creating demand). The ST discount reflects the “price” of points. Yield seekers capture this discount as their return.
  • Strategy loss: NAV drops, your ST redeems for less than deposited. Worst case: $0.
  • Thin AMM liquidity: If you exit early and the pool has low liquidity, you may suffer slippage selling below fair value.
  • NAV staleness: Deposits use oracle NAV, which can be up to 30 minutes old. The deposit fee covers this gap for typical strategies.