Mechanism Overview
Yield distribution and protocol revenue mechanism
Strata introduces a Dynamic Yield Split (DYS) mechanism that enables composable and scalable structured yield products on Ethena’s USDe, delivering tailored risk-reward exposure and improved capital efficiency. It operates as a perpetual risk-tranching protocol that converts Ethena’s synthetic dollar into two distinct assets:
srUSDe (Senior Tranche): Designed for capital preservation, srUSDe offers a stable yield floor benchmarked to Aave’s USDC and USDT lending rates while still participating in the upside of sUSDe APY.
jrUSDe (Junior Tranche): Provides leveraged exposure to sUSDe’s variable APY, absorbing sUSDe APY volatility and other associated risks in exchange for potentially higher returns.
Yield Distribution
Strata’s Dynamic Yield Split is the core mechanism that allocates yield generated from the pooled collateral between Senior USDe (srUSDe) and Junior USDe (jrUSDe), based on sUSDe APY, benchmark rate and the liquidity distribution between the two tranches. This system ensures that when sUSDe APY is above the benchmark rate, the senior tranche benefits from additional coverage provided by the junior tranche, while the junior tranche consistently outperforms sUSDe.
srUSDe always earns a share of the yield generated by the protocol on the pooled USDe collateral by staking USDe. Its yield has a floor equivalent to the benchmark rate and uncapped upside exposure to sUSDe APY. In extreme scenarios (jrUSDe TVL ~ 0, sUSDe APY < benchmark rate), srUSDe will simply earn the same APY as sUSDe.
jrUSDe receives the residual yield after the senior tranche is paid and absorbs any shortfall when sUSDe APY falls below the guaranteed minimum yield for srUSDe tied to the benchmark rate. As a result, jrUSDe outperforms sUSDe APY in high-yield environments but may underperform when sUSDe APY drops below the benchmark rate.
This system creates a natural balance between risk and reward as investors seeking safe and predictable yields choose srUSDe, while those willing to take on more risk for higher returns opt for jrUSDe.
srUSDe and jrUSDe yield split is calculated dynamically based on the USDe balance held in the Ethena StakingRewardsDistributor contract and is distributed linearly over each 8-hour reward epoch, following the same mechanism used by Ethena. The yield allocation dynamically adjusts on every protocol event based on the sUSDe performance, benchmark rate and liquidity in both pools. A detailed technical overview of the protocol and yield distribution mechanism can be found in the Protocol Overview.
Protocol Revenue & Fees
Strata Protocol generates revenue through two types of fees applied to its structured yield products, supporting long-term sustainability and ongoing development. All fees are fully transparent and clearly visible on the app interface.
Management Fee Strata applies a 5% management fee on the yield generated from the pooled collateral. At present, this fee is waived for both srUSDe and jrUSDe. When activated, the full management fee is directed to the protocol treasury.
Redemption Fee Strata charges a fee is when senior and junior tranche assets are redeemed. This fee is vital for managing the platform's liquidity and maintaining a stable operational framework. In particular, the redemption fee helps to mitigate volatility and discourage short-term, speculative withdrawals from senior and junior tranches. The current fee is always displayed transparently on the frontend before any transaction is confirmed. The redemption fee is distributed to senior and junior tranche holders, with a portion allocated to the protocol treasury.
Management Fee
0%
srUSDe Redemption Fee
0%
jrUSDe Redemption Fee
0%
Currently, the management fee is waived for both srUSDe and jrUSDe, and the redemption fees on each asset is distributed entirely to the respective senior and junior tranche holders.
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