> ## Documentation Index
> Fetch the complete documentation index at: https://docs.arcx.trade/llms.txt
> Use this file to discover all available pages before exploring further.

# Strategy Token (ST)

> The principal + yield side of a series. Give up the rewards side and redeem back into vToken at maturity.

Each **vToken** can be part of a [series](/learn/series-lifecycle). A **series** is a fixed period of time with a maturity date where users can separate the principal + yield side from the rewards side.

**ST** is the component you hold when you want principal + yield exposure and are willing to give up the rewards side until maturity.

## What Is ST

Every **vToken** in a series splits into:

$1 \text{ vToken} = 1 \text{ ST} + 1 \text{ EPT}$

One side wants rewards-side exposure and pays upfront for EPT. The other side gives up that rewards side and holds the **principal + yield** side through **ST**.

```mermaid theme={"dark"}
flowchart LR
    A["You give 50 vTokens"] --> C["Series trade"]
    B["EPT buyer gives 5 vTokens"] --> C
    C --> D["You receive 55 ST"]
    D --> E["At maturity, redeem for 55 vTokens"]
```

ST represents your claim on the vault's principal + yield side. The vault returns value through either a fixed rate or a performance-fee split, and that value flows into NAV over time. At maturity, ST redeems back into vToken.

ST trades on the **ST/vToken** orderbook. You buy ST at a discount, so the price of ST is below 1 vToken. In dollar terms, that means ST trades below NAV. The discount exists because EPT buyers are paying for the rewards side of the vToken — the more they pay for EPT, the cheaper ST gets.

See [Orderbook Guide](/learn/orderbook-guide) for how to reason about APR and place ST orders in the app.

***

## Buy the Discount

EPT buyers pay for the rewards side of the vToken, leaving ST available below **1 vToken**. In dollar terms, ST trades below NAV. That discount is the yield seeker's opportunity.

**Example.** NAV is 1.00. ST trades at \$0.98. The vault pays 12% net APR. Over a 60-day series:

* Discount per vToken: \$0.02
* 1 vToken yield in 60 days: 12% × 60/365 = \$0.02
* **Total Yield = 0.04 / 0.98 = 4% per series, or \~24% annualized**

The deeper the discount, the higher the effective return.

***

## Redemption

At maturity, **1 ST = 1 vToken**.

Your ST redeems back into vToken.

Your ST is burned. No fee on redemption.

***

## Selling Before Maturity

Sell ST on the orderbook at any time before maturity. You receive vTokens. This is a market sale, not redemption — you get whatever price the market offers.

As the series approaches maturity, ST price tends to converge toward NAV (in \$) or **1 vToken**.

***

## What Drives ST Price

| Factor              | Effect                                                                                            |
| ------------------- | ------------------------------------------------------------------------------------------------- |
| EPT demand          | More EPT buying means more capital paying for the rewards side, widening the ST discount          |
| Yield seeker demand | Absorbs ST supply, narrowing the discount                                                         |
| Time to maturity    | Price converges toward NAV as the series ends                                                     |
| Vault NAV           | Higher NAV increases the absolute redemption value, but does not by itself change the ST discount |

The ST discount reflects the market price of the rewards side. When rewards-side demand is high, EPT buyers pay more, widening the ST discount. Yield seekers buy ST at that discount and earn a higher effective return.