The combination of vaults and strategies allows Unison to provide users with a powerful and flexible way to earn yield and compound returns on their investments, while also ensuring the security and stability of the platform.
Vaults are the key component of Unison, utilizing the ERC-4626 standard to securely manage deposits and issue vault tokens (uTokens). These vaults act as the intermediary between investment strategies and their underlying assets, receiving reports on metrics such as performance, liquidity, and annual percentage rate (APR) from the strategies.
Strategies, on the other hand, are responsible for actively seeking out and taking advantage of yield-generating opportunities on various blockchain protocols. By compounding returns on a weekly basis(harvesting), these strategies aim to maximize the overall return on investment for Unison users. Through a flexible architecture, strategies can be deployed on any chain, allowing efficient yield generation without negatively impacting the APR when scaling up.
uTokens are vault tokens which gets minted when user deposits assets into a vault. Currently they are used as a certificate of deposit for users and to calculate the pool share for deposited assets. When a user initiates withdrawal, these uTokens are burned according to users pool share and user can redeem his principal deposit with the interest earned.