sOADA

It is important to consider that sOADA, as the staked version of OADA, functions as the sole beneficiary of the yield captured by the entire OADA system. This makes sOADA the Junior tranche, meaning it is fully exposed to any potential system losses in exchange for the continual profits it receives.

sOADA holders benefit from the compounding of yields generated by the various Algorithmic Market Operations (AMOs) deployed throughout the ecosystem. These yields are auto-compounded, enhancing the growth potential of sOADA over time. However, this advantageous position comes with the inherent risk of being the first to absorb any losses should the system encounter unforeseen issues or market anomalies.

Under normal operations, system losses are not expected to occur due to the OADA system's careful design, which emphasizes minimized risk exposure. The strategies employed are meticulously chosen to limit exposure to only smart contract risks and low-level lending risks, ensuring that the probability of significant losses is kept to a minimum.

By participating in sOADA, users are essentially betting on the overall stability and efficiency of the OADA system, trusting in its mechanisms to generate consistent returns while managing risks effectively. This dual nature of high reward and high risk makes sOADA a pivotal component of the OADA ecosystem, driving both the incentive for yield generation and the need for robust risk management.

Last updated