Sector Finance

This content is generated by RD AI and is for reference only

Sector Finance is a decentralized finance (DeFi) protocol that uses a risk engine to analyze the risk of various investment strategies and builds structured yield products based on that analysis. Its core products are two types of vaults: EIP4626 or aggregator vaults, which aggregate multiple strategies and allocate funds among them; and EIP5115 or single-strategy vaults, which act as ERC20 wrappers for a specific strategy. Users deposit underlying assets (e.g., USDC) to receive vault shares, and the vault strategy automatically executes trades, lending, and yield compounding. Withdrawals are either instant (for non-epoch vaults) or two-step (request and redeem, for epoch vaults) to prevent price manipulation. The protocol defines a MANAGER role responsible for processing deposits/withdrawals, strategy rebalancing, and harvests, while a GUARDIAN role can set non-critical parameters (e.g., slippage bounds, rebalance threshold) and manage the MANAGER. The risk engine evaluates risks such as hacks and liquidations, calculates annual value-at-risk (VaR), and converts it into a risk score from 0 to 10 to help users make informed decisions.