This page describes Clearstar's Capital Allocation Framework: the end-to-end process for sourcing, evaluating, approving, deploying, and monitoring yield opportunities across DeFi. As a curator (an entity that selects and manages yield strategies on behalf of depositors), our role is to ensure that every opportunity we allocate capital to has been rigorously vetted and continuously supervised.

The framework is divided into ten discrete stages, each documented in its own dedicated subpage for full procedural detail. The stages fall into three broad phases:

Sourcing and Screening: Identifying opportunities and filtering them against our target allocation thesis.
Due Diligence: Conducting general and category-specific diligence, producing a composite risk rating, and engaging with protocols where improvements are needed.
Ongoing Oversight and Operations: Whitelisting approved addresses, monitoring live positions, constructing the portfolio, and executing transactions.

The diagram below illustrates how these stages connect:

flowchart TD
    A[1 Sourcing Opportunities] --> B[2 Initial Screening]
    B --> C[3 General Due Diligence]
    B --> D[4 Specific Due Diligence]
    D --> D1[4a Asset DD]
    D --> D2[4b Protocol DD]
    D --> D3[4c Blockchain DD]
    C --> E[5 APB Risk Rating]
    D1 --> E
    D2 --> E
    D3 --> E
    E --> F{Pass?}
    F -->|Yes| G[7 Whitelisting]
    F -->|No / Improvable| H[6 Improvements and Engagement]
    H -->|Re-evaluate| E
    G --> I[8 Monitoring and Alerting]
    G --> J[9 Portfolio Construction]
    I --> K[10 Execution]
    J --> K

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    style B fill:#4A90D9,stroke:#2E6BA6,color:#fff

    style C fill:#E8A838,stroke:#B8862D,color:#fff
    style D fill:#E8A838,stroke:#B8862D,color:#fff
    style D1 fill:#E8A838,stroke:#B8862D,color:#fff
    style D2 fill:#E8A838,stroke:#B8862D,color:#fff
    style D3 fill:#E8A838,stroke:#B8862D,color:#fff
    style E fill:#E8A838,stroke:#B8862D,color:#fff
    style F fill:#E8A838,stroke:#B8862D,color:#fff
    style H fill:#E8A838,stroke:#B8862D,color:#fff

    style G fill:#5BB85B,stroke:#3D8B3D,color:#fff
    style I fill:#5BB85B,stroke:#3D8B3D,color:#fff
    style J fill:#5BB85B,stroke:#3D8B3D,color:#fff
    style K fill:#5BB85B,stroke:#3D8B3D,color:#fff

1. Sourcing Opportunities

Sourcing is the first and broadest stage of our capital allocation process. The objective is to maintain continuous visibility over the DeFi yield landscape so that no attractive opportunity goes unnoticed.

We deliberately cast a wide net across automated tooling, professional networks, market intelligence, and on-chain analysis. Relying on a single channel would leave blind spots, so breadth at this stage is essential to ensure comprehensive coverage.

A structured sourcing process also creates a consistent pipeline for subsequent screening and diligence. Every opportunity, regardless of how it was found, is evaluated through the same framework from this point forward.

You can learn more about our sourcing channels, tooling, review cadence, and intake checklists by reading the Sourcing Opportunities page.

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2. Initial Screening

Initial Screening is the first structured evaluation an opportunity undergoes after sourcing. Its purpose is not to perform due diligence, but to confirm two things: that the opportunity fits Clearstar's current capital allocation strategy, and that all information required for the subsequent diligence stages has been collected.

The analyst assigned to the opportunity first checks for any prior engagement with the project, then performs an early fit assessment against the current mandate. Only opportunities that pass this check proceed to the intake form, where the project provides structured data across seven areas: protocol identity, team accountability, governance, security posture, oracle and dependency exposure, operational readiness, and integration intent. The analyst reviews the completed form for completeness, supplements it with independent research, and compiles a screening package that must be approved by a senior analyst before the opportunity advances.

See the full step-by-step process, the intake form structure, and the turnaround targets in Initial Screening .

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3. General Due Diligence

General Due Diligence covers the cross-cutting risks that affect every opportunity regardless of its category: governance and access control, smart contract security, oracle reliability, on-chain financial backing, team reputation and transparency, and economic design.

The primary engine for this stage is VALIS (Vast Active Living Intelligent System), Clearstar's own agentic research pipeline. VALIS is triggered automatically once a senior analyst approves the screening package from Initial Screening and produces a unified report covering all six assessment areas. Each area receives a letter grade (A through F), which is compiled into a single numerical grade that feeds into the APB Risk Rating.

The combination of VALIS's automated analysis with Clearstar's analyst team delivers thorough, efficient due diligence. VALIS handles the high-volume, data-intensive work, while the analyst team brings contextual judgement, domain expertise, and the ability to assess qualitative factors. VALIS is designed to be rerun whenever the Improvements & Engagement stage identifies issues that a project can address, ensuring the report always reflects the current on-chain state.