Allocation
This section describes how the USP board allocates collateral between the whitelisted yield sources. These are classified according to some liquidity tiers
T1: is a cash equivalent product, instantly redeemable (0-2 days) -->
T2: is a short-term yield product, redeemable in less than 1 week ( 7 days) -->
T3: is a long-term yield product, redeemable in less than 1 month (8-30 days) -->
The weights should satisfy the condition
Allocation rules
Sort vaults by descending yield vs duration score (see Formulae)
Fill Tier 2 weight up to the global cap . One-fourth of T2 allocations unlock every week and are constantly moved back to T1
Allocate the remainder to Tier 3 until the target length (12d) is reached
where limits the exposure to T2 products: too small allocation decreases the yield, but too large one risks draining liquidity if many users redeem within one week.
Initial parameters
The USP board can modify the allocation parameters. The default values are:
Instant-redeem service level
97–99%
Operational cushion
1–2 % A
Converts “epoch-day” into APR penalty
0.03–0.05
Max weighted epoch
10–14 days
Upper bound on the total weight of the 7-day vault sleeve
20–30 % A
Optional per-vault cap. Use once the number of vaults is
off / 30 % A
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