Teragon
  • 🌳Introduction to Teragon
  • 🏛️TERAGON'S THREE PILLARS
    • Vectors
      • Vector Basics
      • Benchmarking Methodology
      • Global Crypto Index (GCI)
      • Smart Contract Index (SCI)
      • Chain Ecosystem Indices (CEIs)
      • GameFi Index (GFI)
    • Tensors
      • Balanced Strategy
      • Buy The Dip Strategy
      • Risk-Control Strategy
      • All-Weather Crypto Strategy
    • Hypercubes
      • Ping-Pong Option Vault
      • Worst-Of Put Vault
      • Long Call Options on Tensors
      • DeFi Option Vault (DOV)
  • Teragon - Bastion Managed Vault
    • Overview
    • Investment Guidelines
    • Implementation
    • Fee
    • User Guide
  • Teragon - Bastion Degen Yield Vault
    • Overview
    • Fee
  • TERAGON DAO
    • 🏡Overview
  • DEVELOPERS
    • Deployed Contracts
  • Links
    • Twitter
    • Medium
    • Discord
    • Website
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  • What is the Balanced Strategy?
  • Implementation Example
  • Strategy Details
  • Strategy Algorithm
  1. TERAGON'S THREE PILLARS
  2. Tensors

Balanced Strategy

Passively manage your holdings

What is the Balanced Strategy?

The balanced strategy maintains a specific target weight per crypto token or Index with the remainder of capital used for yield farming. The strategy sets aside a part of the portfolio in cash that will be algorithmically used to buy more of a given asset when markets selloff. When markets rally, the strategy will rebalance to move part of the portfolio in cash. This creates an automatic buy-low, sell-high dynamic that works well for a long term investor.

Yield farming earns a return on spare cash while waiting to be utilized by the Balanced Strategy. This typically entails providing liquidity for others to swap between stablecoins for a fee, or lending to money markets.

Implementation Example

  • A 50-50 balanced strategy using our Global Crypto Index implemented on BSC

  • A user mints the GCI with BNB and deposits GCI into the Balanced Strategy Vault

  • The strategy then invests 50% into Teragon GCI

  • The remaining 50% is in cash and yield farms

  • Every month, the strategy rechecks the weights and rebalances if the target weights are off by 10% or more. This rebalancing is automated inside the smart contracts

  • If there is a market selloff and now the GCI value is only 40% of the total, then the strategy will use the available cash to buy more of the underlying Index to bring the weight back to 50%

Fee Structure

Teragon charges a 1% annual vault fee on all Tensors.

The resulting revenue is directed to the Teragon treasury.

Strategy Details

Strategy Algorithm

Issuance

Rebalance Logic

Rebalance Algorithm

Pi' = New Index price, Py' = New Yield price, Ui' = New Index Unit, Uy' = New Yield Unit

Uy' = (Py' Uy + Pi' Ui) / 2 Py'

Ui' = (Py' Uy + Pi' Ui) / 2 Pi'

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Last updated 2 years ago

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