Overview

This note details how Clearstar conducts its Initial Screening of yield opportunities. It is the second step of the Capital Allocation Framework and describes the process that bridges Sourcing Opportunities and the due diligence stages.

Initial Screening is not a due diligence exercise. Its purpose is twofold:

Validate fit: confirm that the opportunity aligns with Clearstar's current capital allocation strategy and remains viable upon closer inspection.
Gather information: collect every piece of data that the due diligence stages will require, so that analysts can begin their work without delays or information gaps.

The stage produces a complete information package for each opportunity. If the package is incomplete or the opportunity fails the fit check, it does not advance. The diagram below illustrates the end-to-end flow of the Initial Screening stage, from receiving a sourced opportunity through to the handoff into due diligence.

flowchart TD
    A[Opportunity from Sourcing] --> B[Assign analyst and gather context]
    B --> C{Fits allocation strategy?}
    C -->|No| D[Return to source]
    C -->|Yes| E[Send intake form and collect responses]
    E --> F{Information complete?}
    F -->|No| G[Request missing data]
    G --> E
    F -->|Yes| H[Compile screening package]
    H --> I[Senior analyst sign-off]
    I --> J[Handoff to Due Diligence]

    style A fill:#4A90D9,stroke:#2E6BA6,color:#fff
    style B fill:#4A90D9,stroke:#2E6BA6,color:#fff
    style C fill:#4A90D9,stroke:#2E6BA6,color:#fff
    style D fill:#D9534F,stroke:#B52B27,color:#fff
    style E fill:#E8A838,stroke:#B8862D,color:#fff
    style F fill:#E8A838,stroke:#B8862D,color:#fff
    style G fill:#E8A838,stroke:#B8862D,color:#fff
    style H fill:#E8A838,stroke:#B8862D,color:#fff
    style I fill:#5BB85B,stroke:#3D8B3D,color:#fff
    style J fill:#5BB85B,stroke:#3D8B3D,color:#fff

Step 1: Assignment and Context Gathering

When an opportunity is handed off from Sourcing Opportunities, it is assigned to a single analyst. The analyst is responsible for shepherding the opportunity through the entire screening stage.

1.1 Check for Prior Engagement

Before reaching out to the project or beginning fresh research, the analyst checks whether Clearstar has previously interacted with the project or protocol in question. This includes:

Previous screening or due diligence records
Past engagement or correspondence
Historical risk assessments, even if they were conducted under a different strategy or mandate

If prior records exist, the analyst retrieves them and uses them as a starting point. This avoids duplicating work and provides context on what may have changed since the last interaction.

Why this matters DeFi protocols evolve rapidly. A project that was screened six months ago may have changed its smart contract architecture, onboarded new team members, migrated to a different chain, or undergone an audit. Prior records are valuable for context, but they must be supplemented with current information.

</aside>

1.2 Sourcing Channel Considerations

The sourcing channel through which the opportunity was discovered affects how information is gathered:

Sourcing Channel	Information Gathering Approach
Third-party screener (e.g. yield aggregator)	Publicly available data is typically sufficient to begin; the intake form is sent to the project if direct contact exists
Professional network / word of mouth	Contact is already established; the intake form is sent directly to the referring party or the project team
Market intelligence (announcements)	Public documentation from the announcement is reviewed first; the intake form is sent if the protocol is new to Clearstar
Private groups	The analyst compiles what is available from the group discussion, then supplements via direct contact or public sources
On-chain activity tracking	The analyst gathers information manually from public sources (block explorers, protocol documentation, social channels) and attempts to establish direct contact if none exists