Working of âTARS: atvPTmax

The âTARS system (Tokenized Autonomous Rewards Strategies) serves as the autonomous intelligence layer managing the âtvPTmax vault. Its core function is to optimize capital deployment across Pendle Principal Token (PT) markets to maximize net APY while maintaining strict liquidity, maturity, and risk thresholds. The mechanism operates through two complementary rebalancing loops Event-Driven Rebalancing and Periodic Uplift Rebalancing each governed by on-chain data, deterministic filters, and iterative optimization routines.

1. Event-Driven Rebalancing

This process is triggered upon new deposits exceeding $10k or when an existing pool reaches maturity. The system determines whether a full portfolio rebalance is required or if the new inflow can be swapped into the existing PT allocation.

When a rebalance condition is met, âTARS initiates the following sequence:

1. Market Data Fetch: Fetches the latest Pendle PT market data, including yield rates, maturities, and liquidity.

2. Universe Filtering: Applies strict inclusion filters:

   1. Network: Ethereum Mainnet

   2. Market Type: Stablecoin PTs only

   3. Maturity: Minimum 10 days to expiry

   4. Direct USDC zap available

3. Market Segregation: The filtered set is divided into:

   1. Core Set: Markets with >$100M market capitalization

   2. Enhanced Set: Additional qualified markets with alternative yield mechanisms

4. Allocation Optimization: A multi-iteration optimizer computes allocations to maximize net APY under defined constraints:

   1. Enhanced Set ≤ 20% of total allocation

   2. Core Set ≥ 80% of total allocation

   3. Maximum allocation per market ≤ 10%

The optimization output generates a Rebalance Request, instructing reallocation across PT markets.

2. Periodic Uplift Rebalancing

Independently of deposit or expiry events, âTARS performs a periodic uplift rebalance every 14 days. This ensures that vault allocations remain aligned with shifting yield environments and that potential uplift opportunities are captured.

The steps mirror the event-driven process of market data refresh, filtering, segregation, and allocation optimization followed by an Uplift Comparison stage that measures expected APY improvements versus current portfolio returns.

Rebalance thresholds:

• Core Set uplift target: ≥ 2.5%

• Enhanced Set uplift target: ≥ 0.5%

If these thresholds are met or exceeded, âTARS issues a new Rebalance Request; otherwise, the existing allocations remain unchanged until the next cycle.