Core Integration

Overview

Term Strategy integrates seamlessly with Yearn V3's vault mechanics by implementing the three required BaseStrategy hooks: _deployFunds, _freeFunds, and _harvestAndReport. These hooks enable Term Strategy Vaults to manage deposits, withdrawals, and portfolio valuation while aligning with Yearn's operational framework.

Required BaseStrategy Hooks

1. _deployFunds: Handles deposit management.

2. _freeFunds: Manages withdrawals.

3. _harvestAndReport: Calculates total portfolio value for profit and share accounting.

Deposit Management (_deployFunds)

The _deployFunds function sweeps idle assets and redeems matured loans for deployment into fixed-rate loans on Term. The implementation ensures efficient use of capital while maintaining compatibility with Yearn's vault mechanics.

function _deployFunds(uint256 _amount) internal override whenNotPaused {
    if (depositLock) {
        revert DepositPaused();
    }
    _redeemRepoTokens(0);
}

Term Strategy Vault Implementation:

• Redeem Matured Loans: Automatically redeems any matured loans first.

• Sweep Idle Assets: Deposited and idle assets are swept into the idle liquidity vault pending deployment.

_redeemRepoTokens() is a helper method that redeems matured loans and sweeps idle assets (if any) into the idle asset vault pending deployment into fixed rate loans on Term.

Withdrawal Management (_freeFunds)

The _freeFunds function facilitates withdrawals by redeeming matured loans and withdrawing the requested funds from the idle liquidity vault. Like _deployFunds, it leverages _redeemRepoTokens() to automate portfolio adjustments.

function _freeFunds(uint256 _amount) internal override whenNotPaused {
    _redeemRepoTokens(_amount);
}

Term Strategy Vault Implementation:

• Redeem Matured Loans: Withdrawals prioritize the redemption of matured loans.

• Withdraw Requested Funds: Required amounts are withdrawn from the idle liquidity vault.

_redeemRepoTokens() is a helper method that redeems matured loans, withdraws requested funds and sweeps idle assets (if any) into the idle asset vault pending deployment into fixed rate loans on Term. This implementation:

Portfolio Reporting and Valuation (_harvestAndReport)

The _harvestAndReport function calculates the total portfolio value, which is critical for vault profit and share accounting. It redeems matured loans and sweeps assets for comprehensive portfolio valuation.

function _harvestAndReport() internal override whenNotPaused returns (uint256) {
    _redeemRepoTokens(0);
    return _totalAssetValue(_totalLiquidBalance());
}

Term Strategy Vault Implementation:

• Redeem Matured Positions: Sweeps and redeems matured loans.

• Calculate Total Value: Returns _totalAssetValue, which includes:

  • Present value of all Term repoTokens.

  • Present value of open auction offers.

• Liquidity Management: Tends to the portfolio during valuation by leveraging _redeemRepoTokens().

_redeemRepoTokens() is a helper method that redeems matured loans and sweeps idle assets (if any) into the idle asset vault pending deployment into fixed rate loans on Term. This implementation of _harvestAndReport():