Strata Markets Update - Isolated and Saturn Strate
Summary
Strata is a structured-credit style vault that wraps underlying yield strategies with two ERC-4626 tranche vaults: a junior tranche that absorbs first losses and captures residual upside, and a senior tranche that is managed toward a target protected yield. Users are able to deposit into either tranche and receive vault shares, while their assets are deposited into an underlying strategy. In this audit Quantstamp reviewed the introduction of the Isolated (multi) strategy as well as the Saturn strategy. The `IsolatedStrategy` separates the deployment of junior and senior capital across two underlying strategies while presenting them to the CDO as a single strategy. It uses the `MultiStrategy` contract as a base which aggregates assets and supported tokens, routes deposits, coordinates withdrawals across both strategies, and supports rebalancing between them, including deferred withdrawals. `DYSAccounting` tracks time-weighted tranche balances, projects the senior tranche toward its target APR between reconciliations, and replaces these projected returns with realized PnL when the strategy NAV is updated. For `IsolatedStrategy`, reconciliation can use the senior sub-strategy’s exchange-rate movement, isolating senior returns from the performance of the junior sub-strategy. The `SaturnStrategy` integrates Strata with Saturn’s `sUSDat` ERC-4626 vault, which generates yield through vested STRC rewards. It accepts deposits in either `USDat` or `sUSDat`, reports the spot `USDat` value of its `sUSDat` holdings, and exposes configurable withdrawal paths: `sUSDat` withdrawals use an ERC-20 cooldown, while `USDat` redemptions pass through Saturn’s asynchronous NFT-based withdrawal queue. The protocol's testing framework includes both foundry and typescript tests. Overall, the test quality is reasonable but we would strongly suggest that the protocol works on further improvements such as including thorough strategy specific invariant and integration testing. During the audit one high severity issue as well as a number of medium, low and informational severity issues were discovered in the codebase. The high severity issue STR-IS-01 highlights the potential for the core invariant of the protocols accounting (`nav = srtBaseNav + jrtBaseNav + reserveNav`) can be broken due to dust nav increases updating the total `nav` but not the individual senior, junior and reserve navs, bricking protocol deposits and redemptions. We recommend that the protocol team review and address the issues in this report before the protocol update is launched.
Issues (22)
Low | Medium | High | Critical | Total | |
|---|---|---|---|---|---|
Not fixed | - | 1 | - | - | 1 |
Acknowledged | 4 | - | - | - | 4 |
Fixed | 11 | 6 | - | - | 17 |
| Total | 15 | 7 | 0 | 0 | 22 |