Strata

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

Strata is an Ethereum-based risk tranching protocol for building structured yield products. It splits the yield and risk of an underlying strategy (e.g., Ethena's sUSDe) into two tokenized tranches: Senior and Junior. The Senior tranche receives priority stable yield with lower risk, while the Junior tranche absorbs residual volatility and may earn higher returns. Users deposit base assets (e.g., USDe) to mint corresponding tranche tokens (e.g., srUSDe or jrUSDe), which are ERC-4626 compatible and composable. The protocol employs a dynamic yield split mechanism managed by a CDO contract, comprising Strategy and Accounting modules: Strategy handles asset management and reports total TVL, while Accounting calculates tranche values and exchange rates. Yield is first allocated to reserves, then to Junior, after which Senior is paid according to a target index, with the remainder going to Junior. Redemptions may trigger cooldown periods or fees depending on coverage to protect liquidity.