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Perpetual Yield Tranches
What are Idle Perpetual Yield Tranches
In the financial world, a tranche represents a product split that carries specific features like risk, yields, duration. They are often arranged together to create pools of diversified products or a basket of investments with similar characteristics (risk-return related).
Each tranched asset has its own yield source, with two investment profiles (Senior and Junior). Taking as an example the DAI tranche based on the IdleDAI Best-Yield pool, DAI funds deposited into the Senior and Junior class of that Idle-based product are aggregated into a single pool and then deployed into IdleDAI Best-Yield strategy.
Users can decide the strategy according to their risk profile: they can deposit funds into two different tranches (Senior or Junior) in exchange for a token indicating their claim.
Tranches allow users to enjoy DeFi yields with built-in protection on deposits by holding the Senior class, and leverage yield exposure with Junior one.
Last modified 28d ago
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