The vault targets a market exposure percentage, which is achieved via monthly portfolio rebalancing. This keeps the vault near desired weights and provides a buy-low, sell-high dynamic that boosts performance.
Cash held by the vault not only generates yield, but also acts as a buffer to add exposure during market drawdowns. Having exposure to cash is equivalent to having optionality (long gamma) as it allows you to buy-low sell-high algorithmically. The chart below demonstrates the value of being underleveraged in a volatile market like crypto.