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

# Fractality's Investment Methodology

## The Goal 

Fractality's Yield Vault seeks to deliver high yield (\~20%) to users with limited risk (drawdown of \~2%) and low costs (no need for high-frequency trading).

## Investment Instruments

We focus on Defi. The income sources are categorised into: 

* Mining/Staking
* Borrowing/Lending
* DEX and Liquidity providing
* Speculation

The Fractality Yield Vault utilizes the first three categories to generate yield. As for pure speculation, we believe users can effectively manage it themselves through proper research.

## Methodology

Fractality aims to deliver high yield with low risk and low cost by effectively addressing the trade-off between:

* DEX and Liquidity Providing: This category offers higher yields (\~20% or more) but comes with high market risk or impermanent loss.
* Borrowing/Lending: This category generally provides lower yields (\~5% to 10%), but with lower risk and higher liquidity, supporting real-time withdrawals.

Our approach includes both macro and micro-level analysis to select the most suitable chain and protocol, along with quantitative analysis to hedge downside risks.