@Lorenzo Protocol #LorenzoProtocol $BANK
Once risk is segmented, the next question becomes unavoidable: how should different strategies interact with each other?
In traditional finance, this problem is solved through portfolio construction. In DeFi, it has often been left to the user.
Combined vaults in Lorenzo move that responsibility back into the protocol.
Unlike simple vaults, which isolate a single strategic logic, combined vaults exist to orchestrate interaction. Capital is routed across multiple strategies according to predefined rules, weights, and constraints. The objective is not maximum exposure, but controlled capital behavior across varying market conditions.
This is where Lorenzo starts to resemble an asset allocator rather than a yield platform.
Capital routing is the key concept here. Funds are not statically deposited into a pool and left to drift. They are actively distributed across strategy components, allowing the protocol to express higher-level financial intent: balance between trend-following and volatility capture, blend between yield stability and directional exposure.
What’s important is that this routing is structural, not reactive. It doesn’t depend on users constantly reallocating positions or chasing performance. The logic is embedded at the vault level, where strategy composition is defined before capital enters the system.
This reduces a familiar DeFi problem: correlation blindness.
When users manually combine strategies, correlations emerge implicitly and often too late. Combined vaults make those relationships explicit. Performance is no longer just the sum of parts — it becomes the result of how those parts are weighted, sequenced, and constrained.
There is a tradeoff here. Combined vaults introduce more abstraction and more responsibility at the protocol layer. Governance decisions, parameter tuning, and strategy design carry systemic consequences. But that tradeoff reflects a broader shift in DeFi’s direction.
As systems mature, responsibility concentrates.
Lorenzo seems to accept this openly. Rather than pushing complexity outward to users, it internalizes it within architecture. The user chooses exposure. The protocol handles composition.
In practice, this creates a different relationship with capital. Participation becomes less about tactical execution and more about strategic alignment. Users are no longer assembling portfolios through trial and error. They are opting into a defined capital behavior.
Seen this way, combined vaults are not an upgrade to simple vaults. They are a different layer entirely — one that treats DeFi strategies as building blocks rather than standalone products.
The open question is whether this model can scale without losing flexibility. Whether on-chain asset management can remain adaptive while encoding so much logic upfront.
But one thing is clear: once capital routing becomes a protocol feature rather than a user task, DeFi stops being a collection of tools — and starts behaving like a system.
