> For the complete documentation index, see [llms.txt](https://docs.levelq.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.levelq.finance/the-tonyield-academy-faq/vault-strategies-and-mechanics.md).

# Vault Strategies and Mechanics

**What is a vault, and how does it work on TONYield?** 

A vault in TONYield is a smart contract that automates particular yield-generating strategies, such as liquidity provisioning and staking. Users provide liquidity into the vaults, which then strategically deploys them into different protocols to maximize returns.

**What types of strategies does TONYield employ?** 

TONYield employs various strategies including liquidity provisioning, staking, and arbitrage across multiple DeFi protocols to optimize returns.

**What assets are accepted in TONYield vaults?** 

Assets like TON, USDT, and TON staked versions such as tsTON and stTON are accepted, allowing a broad range of opportunities for yield.

**What is the projected APY, and how is it calculated?** 

The projected APY depends on the strategies employed and the performance of the underlying protocols. It's calculated based on the returns from these strategies over a year, adjusted for risk and the cost of operations.

**How does TONYield manage impermanent loss and other risks?** 

TONYield employs strategies such as hedging and diversification to minimize risks like impermanent loss. Additionally, smart contracts and rigorous security protocols are in place to safeguard user assets.

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