This liquidity vault consists of one fixed tranche and one variable tranche. Ondo combines both tranches to create a Uniswap V2 liquidity pair (LP).

Upon vault expiration, the strategy exits the LP position and pays fixed tranche depositors their principal plus an agreed APR in the form of their respective token. All remaining funds are paid to variable tranche depositors in their respective token.

The fixed tranche benefits from a predictible APR, while the variable tranche benefits from all trading fees and leveraged exposure to the performance of the pool.