Strategy LP

A Strategy LP provides capital directly to a Strategy Vault and participates in the full economic performance of the strategy. This role is designed for participants who want exposure to strategy upside and are willing to absorb strategy drawdowns.

Strategy LPs are owners of the strategy, not lenders.

1. Discovering a Strategy Vault

A Strategy LP begins by browsing available Strategy Vaults.

Each vault displays:

• Strategy description and execution approach

• Historical performance metrics

• Maximum drawdown parameter

• Current vault equity and share price

• Capital composition (creator vs LP capital)

This information allows Strategy LPs to assess risk, performance, and alignment before participating.

2. Depositing Capital

To participate, the Strategy LP deposits capital into the selected Strategy Vault.

Upon deposit:

• Capital is transferred into the vault’s program-controlled account

• The LP receives vault shares in return

• Shares represent proportional ownership of the vault’s total equity

Shares are the only representation of ownership.

3. Ownership & Share Dynamics

Vault shares reflect the Strategy LP’s claim on the vault:

• Profits increase the value of each share

• Losses decrease the value of each share

• Drawdowns are absorbed proportionally across all shares

Strategy LPs:

• Participate in both upside and downside

• Are subject to the vault’s maximum drawdown constraint

• Are not protected from strategy losses

There is no fixed yield or guaranteed return.

4. Fees & Performance Impact

Strategy LPs are subject to the vault’s fee structure:

• Management Fee (2%) Applied continuously via share dilution

• Performance Fee (20%) Applied only on net profits above the high-watermark

Fees reduce the rate at which share value grows, but do not extract assets directly from the vault.

5. Profit Allocation & Compounding

When the strategy generates profit:

• 70% of net profits remain within the Strategy Vault and compound

• 30% of net profits are allocated to the vault’s associated lending market

Strategy LPs benefit from compounding strategy capital, while contributing indirectly to the broader ecosystem through lending markets.

6. Monitoring & Risk Awareness

Strategy LPs continuously monitor:

• Vault equity and share price

• Strategy performance and volatility

• Drawdown relative to the maximum threshold

• Capital flows in and out of the vault

If the vault exceeds its maximum drawdown:

• Positions are force-closed

• Assets are stabilized

• Further losses are prevented

7. Withdrawing Capital

Strategy LPs may exit the vault by redeeming shares.

Upon withdrawal:

• Shares are burned

• The LP receives a proportional amount of the vault’s assets

• The withdrawal reflects current vault equity and share price

Withdrawals are always proportional and transparent.