> ## Documentation Index
> Fetch the complete documentation index at: https://docs.thaler.finance/llms.txt
> Use this file to discover all available pages before exploring further.
# What is Thaler
> What the protocol does, who it is for, and why a delta-neutral position earns more reliable yield than a single-strategy product.
## Definition
Thaler is a Solana yield protocol. A user deposits SOL into a self-custodial vault. The vault allocates that SOL across three strategies that earn from independent sources: a liquid staking position, a deposit-borrow loop on a lending market, and a short perpetual position. The long staking exposure and the short perpetual exposure are sized to offset each other, so the realised return reflects the rates earned rather than the price of SOL during the holding period.
Each vault is bound by a Squads policy extension co-signed at creation. The policy is immutable once signed. The protocol cannot move funds outside the rules in the policy, and the policy enumerates the allowed assets, the allowed venues, the leverage cap, the claim cadence, and the closure procedure.
## Sources of return
| Pillar | What it earns | What it pays |
| --------------- | ------------------------------------------------------- | -------------------------------------------------------------------- |
| Liquid staking | Solana staking reward, paid into the LST exchange rate | Nothing |
| Lending loop | Supply yield on Kamino + staking yield on collateral | The SOL borrow rate |
| Perpetual hedge | Funding payments when SOL perpetual funding is positive | Funding payments when funding is negative; net positive over history |
In steady state the three pillars sum to a net positive rate. The exact decomposition shifts with conditions, which is the structural reason the total return is more stable than any single component.
## Who it is for
Users with idle SOL who want it to earn a return without converting to a stablecoin and
without giving up custody.
Capital that can sit in the vault long enough for the penalty schedule to decay to zero
(96 days). Closing after that point is free.
Reviewers verifying custody, claim cadence, and closure rules before signing off on an
integration.
Teams that want a vault primitive they can route deposits into from a wallet or
aggregator.
## The case for delta-neutrality
A long-only SOL position earns staking and lending yield but is fully exposed to the price of SOL. A short-only position pays or receives funding and is exposed in the opposite direction. Pairing both sides at matching size cancels the directional exposure and isolates the yield differential.
The realised outcome differs sharply by structure:
| Strategy | When SOL rises | When SOL falls | Realised return tracks |
| ---------------------------- | ------------------- | -------------- | ---------------------- |
| Long-only SOL | Strong appreciation | Loss | Spot price |
| Short-only SOL | Loss | Appreciation | Inverse spot price |
| Thaler vault (delta-neutral) | Yield only | Yield only | Rates earned |
The user is exposed to the rates earned (staking yield, lending spread, perpetual funding), not the direction of SOL.
## Scope
Thaler is not a discretionary fund. The strategy executed by a vault is fixed at creation and enforced on chain. The protocol cannot widen the mandate, change the venues, or move assets outside the rules signed by the user.
Thaler is not a directional bet on SOL. The hedge inside each vault is sized so the value of the position tracks the yield earned, not the price of SOL. Realised return is uncorrelated with SOL spot movement over the holding period.
Thaler is not insurance. The protocol guarantees the per-tier yield floor advertised at creation and protects deposit principal through its reserve. The third-party venues the vault interacts with carry residual smart-contract and counterparty risk that no on-chain policy can fully eliminate. See [Risk disclosure](/security/risk-disclosure).
## The beta in context
The current beta accepts a fixed deposit of 2 SOL per vault. This equalises capacity across early users and keeps operational variance low during the first wave. After the beta closes, deposit sizing becomes variable and the protocol opens additional strategy families beyond Thaler One.
The rest of the product is identical to the production target: same custody model, same claim mechanics, same closure rules. The beta does not collect any data the production build will not collect.
## Next read
The four components that make up a vault.
Who holds the keys, and why the rules cannot change after signing.