APY & Strategy Logic

Ceres vaults are built to generate consistent and risk-adjusted yield. Each vault follows a predefined strategy that runs automatically once you deposit.

How APY is Calculated?

APY reflects combined returns from multiple components, including:

• Fixed yield instruments

• Loop-based borrowing

• Reward incentives from protocol activity

Vaults track both base yield and any additional rewards earned.

Key Yield Sources

Pendle Principal Tokens (PTs) Vaults deposit yield-bearing assets into Pendle to mint PTs. These are bought at a discount and redeemed at full value at maturity, locking in a fixed return.

Silo Borrowing Loops PTs are used as collateral in Silo to borrow more stablecoins. The borrowed funds are recirculated within the same strategy, utilizing safe leverage that is controlled by vault parameters.

smsUSD Strategy For the live smsUSD vault, deposits are automatically swapped and deployed through the flow. The system captures fixed yield from Pendle while recycling collateral in Silo to boost returns.

Partner Points and Incentives Along with yield, users earn points from Sonic, MainStreet, and Silo. These may qualify for multipliers, boosts, or future airdrops.

Allocation Logic

Ceres vaults follow a fixed strategy with parameters defined by:

• Real-time protocol yield data

• Protocol safety metrics (TVL, utilization, volatility)

• PT maturity options and market spreads

• Internal caps to limit exposure and manage leverage

Upcoming Enhancements

Future updates will include:

• Risk scoring across strategies to improve allocation

• AI-based rebalancing for optimizing APY

• Transparent APY breakdowns in the user dashboard