# Structured Risk
Structured Risk takes yield from any underlying asset and splits it into two tranches with different risk-return profiles.
Shielded or Amplified. **You choose which side suits you**.
* If you want protection against a potential drawdown, you can **shield your APY.**
* If you have conviction on the position, you can **amplify your APY.**
### Shielded
Shielded is the senior tranche of the yield. It prioritizes capital protection in the event of losses, earning a lower but more stable return.
The mechanic is simple. You deposit a Yield Bearing Asset (YBA), like ONyc, and receive the shielded version of it: shONyc.
The shielded token accrues value as the underlying asset does. Generating yields for you. A cut of these yields is paid to Amplified (junior tranche) for their protection, with losses absorbed first.
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The Coverage of Shielded varies based on the asset and market demand. Each vault has a coverage target, and APY adjusts automatically to attract the right balance of Shielded and Amplified deposits.
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### Amplified
Amplified is the junior tranche of the yield. It earns a higher yield, but absorbs any losses first.
The mechanic is simple. You deposit a Yield Bearing Asset (YBA), like ONyc, and receive the amplified version of it: amONyc.
The amplified token accrues value as the underlying asset does. Generating yields for you. A cut of shielded yields is paid to you for protection, thereby amplifying your returns.
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Amplified absorbs losses first in a drawdown event. The higher yield comes with more risk.
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### How yields are determined
Neither tranche has a fixed rate. Both adjust dynamically based on two factors:
1. Coverage ratio — each vault has a target coverage, needing a balance between Amplified and Shielded TVL. Shielded has a cap on deposits based on this coverage and Amplified TVL.
2. Supply and demand — when one tranche is undersupplied, its yield rises to attract more capital. The protocol self-balances without manual intervention.
Example:
ONyc generating 10% APY, 100% coverage (equal TVL on both sides)
| | Shielded | Amplified |
| --------------- | -------- | ---------------- |
| APY | \~7% | \~13% (uncapped) |
| Performance fee | None | 0.5% of spread |
| Net APY | \~7% | \~12.5% |
If Amplified TVL doubles (200% coverage):
• Shielded cap rises → more attractive for conservative depositors\
• Amplified yield per unit dilutes → market rebalances naturally
| Text | Shielded | Amplified |
| --------------- | -------- | ---------------- |
| APY | \~8% | \~12% (uncapped) |
| Performance fee | None | 0.5% of spread |
| Net APY | \~8% | \~11.5% |
### Fees
Lince takes 0.1% redemption fee on the amplified tranche (1% to make it instant) and a 0.5% performance fee of the amplified spread.
### Technical details
Each YBA has a unique vault with 2 PDAs, one for amplified and another for shielded.\
When the user deposits, he chooses shielded or amplified and the YBA goes to the chosen tranche PDA.
The program mints a Token representing the user position within the vault.
As the deposited YBA grows in value, the token minted to the user accrues value, delivering the yield.
Shielded pays a protection fee on this yield by transferring a portion of the YBA from the shielded PDA to the amplified PDA.
In case of loss, the program transfers YBA from the amplified PDA to the shielded PDA to ensure the shielded PDA is not affected.
There is a maximum drawdown on each vault, which depends on the coverage ratio.
Coverage ratio and APYs vary with the shielded/amplified deposits, always looking to meet the target ratio, which is set by the team, based on the vault YBA expected risk.
### Start Splitting Risk
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