> For the complete documentation index, see [llms.txt](https://docs.mstable.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.mstable.org/docs/how-mstable-works.md).

# How mStable Works

The building blocks behind the **Stacked Yield** product and how they work together.

### The product

**Stacked Yield** is a single vault represented by a single ERC20 token (**mPT-sUSDe**). Depositors hold the token; the vault does the work.

* **One vault, one token.** All depositors share the same strategy.
* **Actively managed by mStable.** Positions shift across supported yield markets as opportunities change.
* **Non-custodial.** Funds are held in audited smart contracts, not by an operator.
* **Automated.** Bots handle rebalancing and risk-limit enforcement in real time. Position rollovers are managed by mStable as part of active vault management.

### Strategy

Stacked Yield deploys capital across supported yield markets and is actively managed by mStable to compound returns over time. The vault uses leverage when profitable, within defined risk limits. The mix of positions shifts as opportunities change, so the docs describe what the vault is built to do rather than what it is holding at any given moment.

For current positions, allocations, leverage, and APY, see the [vault page on mstable.com](https://www.mstable.com/vault/0xfec2adfa296fe189f53089fd5ccd8c28dd559cf2).

### Building blocks

The vault is built to compose positions from a range of DeFi primitives. The kinds of building blocks mStable can use:

* **Yield-bearing stablecoins:** base-layer yield assets, for example Ethena's sUSDe.
* **Fixed-yield wrappers:** Pendle Principal Tokens and similar instruments that lock in a return until expiry.
* **Onchain lending markets:** Aave and equivalents, used for collateralized borrowing and looped exposure when the spread is profitable.
* **Other audited yield sources:** added as they meet the vault's risk and liquidity bar.

Which of these the vault uses at any time depends on where the best risk-adjusted yield is. See [Integrations](/docs/integrations.md) for protocol-by-protocol detail on the systems mStable currently interacts with.

### Token output

The result is an ERC20 token (**mPT-sUSDe**) that:

* Represents a position in the Stacked Yield strategy.
* Appreciates in value as yield is realized.
* Requires no manual management from the holder.

### Key features

* **Fixed yield component** while PT positions are open.
* **Amplified exposure** via leverage when profitable.
* **Managed rollovers:** expired positions are reinvested as part of vault management.
* **ERC20 simplicity:** tradable, composable, portable across DeFi.


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