📈Strategy overview

How Lobster strategy works ?

As you know, Lobster offers global DeFi strategies aiming to outperform a single token in a stable and sustainable way, 100% automated. These strategies rest on three main pillars:

• Enable people to deposit and outperform a single deposited asset. For this reason, one vault on Lobster corresponds to one token. The aim is to generate additional yield on top of it. However, as the strategy is based on liquidity pool technology, which normally requires two initial deposit assets, we need to cancel exposure to the second token to which we do not wish to be exposed. This is known as "market-neutral exposure".

• As we rely on liquidity pools, we also need to manage the impermanent loss of positions. To this end, Lobster uses concentrated liquidity pool technology (CLMM), which, when properly mastered, reduces the impact of impermanent loss on positions.

• Ensure optimal rebalancing As Lobster masters multi-protocol strategies, micro-transactions between these protocols are often necessary to ensure the continuity and smooth running of the strategy. This is why we need to rebalance frequently the global strategy, as described in the arbitration process.