> For the complete documentation index, see [llms.txt](https://optim-finance.gitbook.io/optim-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://optim-finance.gitbook.io/optim-finance/oada/overview.md).

# Overview

<figure><img src="/files/uskjzihaWNH3lwAPo8kf" alt=""><figcaption></figcaption></figure>

[OADA](https://app.optim.finance/oada/mint-stake-earn) is an innovative ADA derivative system on Cardano that provides users with superior yield opportunities, enhanced governance, and DeFi composability. The OADA system is the first true yield aggregation dApp on Cardano. ADA deposited into the system to mint OADA is deployed productively into strategies via [Algorithmic Market Operations](https://optim-finance.gitbook.io/optim-finance/oada/amos) \[AMOs] to generate yield for users.

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## High Level Architecture

### [OADA 🟣 and sOADA 🟢](https://optim-finance.gitbook.io/optim-finance/oada/oada-and-soada)

The system utilizes two tokens: **OADA** and **sOADA**.

* **OADA** is pegged to ADA but doesn't receive any yield.
* **sOADA** is staked OADA. It is not a pegged token, but it receives all of the yield generated by the system and also bears the risk of any unlikely losses the system may take on.

### [Splash Dex](https://optim-finance.gitbook.io/optim-finance/oada/amos/splash-dex-amo)

The OADA system is integrated deeply with the [OADA/ADA stableswap pool](https://app.splash.trade/liquidity/9b04cc602ed685b69356c050653ffd92bb291f8e599dc9827252ef41.6e6674) on Splash. The Splash DEX AMO is what maintains OADA's peg to ADA. The Splash DEX is also how users exit their OADA position - there is no direct redemption mechanism for OADA back to ADA.

### [Epoch Stake Auction](https://optim-finance.gitbook.io/optim-finance/oada/amos/stake-auction-amo)

Throughout each epoch, users can bid on the staking power of all ADA in the system's reserves. This can be useful for Governance, ISPOs, and other yield strategies. This utility of borrowing staking power should be familiar to users of the previous Optim product [Liquidity Bonds](https://optim-finance.gitbook.io/optim-finance/liquidity-bonds/overview). Near the end of each epoch, ADA reserves are pulled from strategies, the stake power gets auctioned off, and after the next epoch begins the ADA reserves are redeployed into strategies again via AMOs.