Configuration Guide
Configuration Guide
The Configuration Guide provides detailed instructions for setting up and managing Term Strategy Vaults. It covers administrative parameters, risk settings, protocol integration, and emergency controls to ensure efficient and secure operation.
Yearn V3 Administration
Feature
Details
Profit Mechanics
setProfitMaxUnlockTime(3 days) – Time window for profit realization.
setPerformanceFee(1000) – Default 10% in basis points.
Profit Unlocking
Profits accrue linearly over profitMaxUnlockTime.
Prevents PPS manipulation.
Recommended report() frequency: 3 days.
Performance Fees
Default: 10% of profits.
Split: 80% to curator, 20% to Yearn.
Charged at report() and sent to performanceFeeRecipient.
Administrative Roles
Role
Responsibilities
Manager
Strategy control, parameter configuration, emergency functions, fee settings.
Keeper
Calls report(), triggers profit realization, matches profit unlock cycle, essential for performance tracking.
Performance Fee Recipient
Passively receives performance fees (must not be zero address or the strategy itself).
Reporting Cycle
Action
Details
Report Function
Called by the keeper. Recommended frequency: every 3 days. Triggers profit realization and starts a new unlock period.
Profit Realization
- Time 0: report() called, profit locked.
- Time 0-3 days: Profit unlocks linearly.
- Time 3 days: All profit realized.
Deployment Configuration
Field
Description
_asset
Underlying asset address.
_assetVault
4626 vault for idle funds.
_discountRateAdapter
Oracle for repo token pricing.
_eventEmitter
Event logging contract.
_governorAddress
Governance safe address.
_termController
TERM protocol controller.
_repoTokenConcentrationLimit
Maximum exposure per token.
_timeToMaturityThreshold
Maximum weighted maturity.
_requiredReserveRatio
Minimum liquidity ratio.
_discountRateMarkup
Rate premium.
Risk Parameters
Parameter
Function
Recommended Range
Details
Concentration Limit
setRepoTokenConcentrationLimit(uint256)
10-25% (1000-2500 bps)
Maximum exposure to a single repo token. Balances diversification and yield.
Maturity Threshold
setTimeToMaturityThreshold(uint256)
90-180 days (7776000-15552000 seconds)
Maximum weighted portfolio maturity. Balances duration risk and yield.
Reserve Ratio
setRequiredReserveRatio(uint256)
Min 10% (1000 bps)
Minimum liquid balance for withdrawals. Ensures portfolio liquidity.
Market Parameters
Parameter
Function
Recommended Range
Details
Rate Configuration
setDiscountRateMarkup(uint256)
0-200 bps
Premium over TERM auction rates. Adjust to reflect market conditions.
Collateral Settings
setCollateralTokenParams(address, uint256)
Based on asset risk
Minimum collateral ratio. Ensure values exceed TERM protocol minimums.
Protocol Integration
Component
Function
Details
TERM Controller
setTermController(address)
Validates repo token deployments. Ensure compatibility with TERM protocol. View list here.
Discount Rate Adapter
setDiscountRateAdapter(address)
Provides repo token pricing. Align with TERM controller for accurate rates.
Emergency Controls
Feature
Function
Details
Pause Configuration
pauseDeposit(), unpauseDeposit()
pauseStrategy(), unpauseStrategy()
Granular controls for emergencies. Ensure users are notified.
Blacklist Management
setRepoTokenBlacklist(address, bool)
Exclude specific repo tokens during emergencies. Monitor exposure levels.
Configuration Examples
Setup
Parameter
Value
Details
Conservative
Concentration Limit
10% (1000 bps)
Focuses on diversification and liquidity.
Maturity Threshold
90 days
Minimizes duration risk.
Reserve Ratio
20% (2000 bps)
Ensures ample liquidity for withdrawals.
Discount Rate Markup
25 bps
Provides a modest premium over auction rates.
Aggressive
Concentration Limit
25% (2500 bps)
Maximizes yield by increasing exposure to specific tokens.
Maturity Threshold
180 days
Focuses on longer-term returns.
Reserve Ratio
10% (1000 bps)
Balances liquidity needs with capital deployment.
Discount Rate Markup
50 bps
Adjusted for higher spread.
Configuration Best Practices
Area
Best Practice
Parameter Changes
Start conservatively. Change one parameter at a time. Monitor metrics before further adjustments.
Risk Management
Regularly review parameters. Align with market conditions. Monitor protocol exposure.
Emergency Actions
Test pause functionality. Define clear triggers. Document emergency response procedures.
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