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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