Asset Flow Example

To understand the general architecture and functioning of the system, it helps to consider a simplified flow of assets within the system:

1. Deposit – User deposits assets into Autopool. After this action, the Autopool has idle assets and the user gets the respective receipt token in return;

2. Rebalance – After a certain threshold of assets are deposited into the Autopool the Strategy backing it starts to accept proposals from the Solver. Once a proposal satisfies the constraints imposed by the Strategy, the assets in the Autopool are sent to the Solver which will then return LP tokens to the Autopool;

3. Auto-compounding – On a periodic basis, rewards from destinations are claimed and collected via a keeper process. These tokens are then converted into the Autopool base asset;

4. Debt Reporting – Each Autopool goes through a debt reporting where the system re-values the LP tokens held by that Autopool. During that process, any available auto-compounded rewards are claimed and come into the Autopool as idle funds;

5. Restart – With sufficient idle assets in the Autopool, another rebalance can occur.

In other words, users deposit assets into Autopools, the stats contracts provide on-chain information about the market, and the solver proposes rebalances to the strategy. To be accepted, the proposed rebalance must meet the strategy's constraints. The above outline focused on idle → LP rebalances but the rebalance step can occur for LP → LP rebalances as well. So long as the proposal results in a higher potential return (and satisfies other constraints) it can be executed.