> For the complete documentation index, see [llms.txt](https://epipendao.gitbook.io/epipendao/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://epipendao.gitbook.io/epipendao/introduction/publish-your-docs/vault-strategy.md).

# Vault Strategy

The Epipen Vault dynamically adjusts asset allocation across multiple strategies, based on factors like market conditions, yield rates, and asset risks, to ensure optimal asset allocation. The system’s logic allocates assets into the following three main strategies:

* LP Earn (Liquidity Mining): A portion of assets is allocated to liquidity pools (e.g.decentralized exchange liquidity pools) to earn transaction fees and liquidity rewards.
* Stake Earn (Staking Rewards): Assets are directly staked in various validator nodes or staking protocols to earn on-chain native rewards.
* Derivatives (Advanced DeFi Strategies): High-level derivatives strategies involve allocating assets to advanced DeFi protocols (e.g.Kernel, Pendle, Binomial) to earn compound returns. Some assets are also used for real-world asset investments or further enhanced through restaking protocols.

**Ecosystem Goal**

By combining staking, liquidity, lending, and derivatives strategies, the system optimizes asset returns and forms an interconnected DeFi ecosystem.

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