Strata is a generalized risk-tranching protocol that brings structured yield products to any on-chain or off-chain yield strategy by splitting yield into tokenized senior and junior tranches, each tailored to distinct risk–reward profiles.

Strata provides on-chain allocators with structured access to yield products across the risk–reward curve.

• Senior Tranche is suitable for conservative users, offering safe and predictable yields.
• Junior tranche is suitable for risk-tolerant users seeking higher-yield opportunities with greater upside.

Risk-tranching is a way to split a single pool of assets or cash flows into distinct layers (tranches), each with a clearly defined risk–reward profile. This allows different users to choose exposure that matches their risk appetite, rather than everyone earning the same blended APY with hidden risks. By design, risk-tranching makes risk explicit and intentional.

Strata implements this fully on-chain by transforming a one-size-fits-all yield into two tokenized, risk-based tranches: senior and junior. The senior tranche is a yield-bearing token with priority on cash flows, while the junior tranche is a risk-bearing token that absorbs losses first in exchange for higher potential returns.

Strata is a fully on-chain protocol using its Dynamic Yield Split (DYS) mechanism to split underlying yield into senior and junior tranches.

• Senior tranche is protected against underlying strategy and collateral risks by the additional coverage provided by the junior tranche.
• Junior tranche serves as a market-priced, liquid insurance fund, earning a risk-premium from the senior tranche and amplified upside to the underlying yield.

Both tranches are fully permissionless, composable tokens that can be further used across DeFi and CeFi.

Strata Protocol has undergone multiple audits by leading security firms, with reports available in the Audits section. However, no protocol or dApp is entirely risk free. Strata is subject to smart contract, underlying collateral and protocol, market, liquidity, and operational security risks. These risks and the mechanisms to mitigate them are detailed in our documentation.