Allocators

Allocators are capital providers seeking exposure to Symbiotic's yield opportunities by depositing assets into Symbiotic vaults.

Each vault is independently managed by a curator, who defines how capital is utilized. Depending on the vault strategy, capital may secure Symbiotic applications, be allocated across external protocols through Liquidity Adapters, or participate in other yield-generating strategies supported by the protocol.

Choosing a Vault

Before depositing, allocators should understand how a vault generates yield and the risks associated with its strategy. Although multiple vaults may accept the same collateral asset, they can differ significantly in terms of the applications they secure, the operators they rely on, the external protocols they interact with, and the overall risk profile.

Ultimately, the decision of where to allocate capital depends on the allocator's own investment objectives and risk tolerance.

Understanding the Risks

Allocators are exposed to the risks of the strategy implemented by the curator. For vaults securing Symbiotic applications, this includes understanding the slashing conditions and the economic assumptions behind the secured networks.

When a vault uses Liquidity Adapters, allocators should additionally evaluate the risks of the underlying protocols or tokenized assets receiving capital. These may include smart contract risk, counterparty risk, liquidity constraints, redemption mechanics, and, in the case of RWAs, issuer-specific considerations.

Depositing Capital

Once a suitable vault has been selected, allocators can deposit the supported collateral asset into the vault, subject to any deposit limits or whitelisting requirements configured by the curator.

In return, the allocator receives ERC-20 vault shares representing a proportional claim on the vault's assets. As the vault strategy generates yield, the value of these shares increases over time, reflecting the vault's accumulated returns.