> For the complete documentation index, see [llms.txt](https://docs.trilobyte.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.trilobyte.finance/readme.md).

# Trilobyte Protocol

Decentralised lending infrastructure on Stellar

> Real-world businesses borrow working capital; investors earn yield on incoming cash flows, split into a senior and a junior tranche.

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**Trilobyte is currently in active development on Stellar Testnet.** Smart contracts are undergoing auditing and are not yet deployed on mainnet. This documentation reflects the tranched-waterfall protocol as of September 2026 — see the [Changelog](/resources/changelog.md).
{% endhint %}

## What is Trilobyte?

Trilobyte is a **decentralised lending protocol** built on Stellar's [Soroban](https://soroban.stellar.org/) smart contract platform. It connects businesses that need working capital with investors who want transparent, yield-bearing exposure to real-world cash flows.

Each loan is represented by a **Vault** — a smart contract that manages the full lending lifecycle from fundraising to repayment. Pool Managers underwrite and structure loans, while investors fund them in one of two tranches and earn yield from the borrower's periodic repayments.

## How It Works

1. A **Pool Manager** evaluates a business and structures a loan, including a leverage ratio that sets the size of the junior tranche
2. **Junior investors** (starting with the manager's own collateral) fund the first-loss junior tranche; once it is locked, **senior investors** fund the rest
3. The **Borrower** receives the capital and makes periodic repayments
4. Each repayment flows through a strict **six-bucket waterfall** — reserve fee, senior interest, senior principal, junior interest, junior principal, then residual to the borrower
5. **Investors** claim yield from their tranche's pool; on default, recoveries pay senior in full before junior sees anything

See [Tranches and the Waterfall](/overview/tranches-and-the-waterfall.md) for the non-technical walkthrough, or [Payments & the Waterfall](/protocol-mechanics/payments-and-emi.md) for the mechanics.

## Key Features

* **Two tranches, one first-loss cushion** — the pool manager's own collateral anchors the junior tranche; senior capital is capped at a governed leverage multiple of junior
* **On-chain transparency** — every deposit, payment, and claim is recorded on Stellar
* **SEP-41 debt tokens** — investors receive non-transferable tokens representing their tranche position
* **Manager accountability** — pool managers stake collateral that gets slashed on default, after borrower collateral (if any)
* **Optional real-world-asset collateral** — a borrower can additionally pledge a tokenized asset into a shared escrow, seized first on default
* **Covenants and exposure caps** — borrower/manager concentration limits, a reporting covenant, and a cash-pool lock while a borrower is behind
* **Optional compliance gate** — a protocol-wide allowlist can gate investing, borrowing, and vault creation
* **Timelock governance** — critical protocol changes (fees, roles, upgrades) go through a time-delayed governance process, hardened so upgrades themselves can require the timelock
* **Built on OpenZeppelin** — Access Control, Pausable, Upgradeable, and FungibleToken modules

## Quick Links

{% content-ref url="/pages/BO0jwYHMKw70MCbWIMev" %}
[What is Trilobyte?](/overview/what-is-trilobyte.md)
{% endcontent-ref %}

{% content-ref url="/pages/ULwYxJKPxhKlN4YTazzh" %}
[Tranches and the Waterfall](/overview/tranches-and-the-waterfall.md)
{% endcontent-ref %}

{% content-ref url="/pages/pUXNhyP7BZvrtwxylhfm" %}
[How a Loan Works](/overview/how-a-loan-works.md)
{% endcontent-ref %}

{% content-ref url="/pages/hESn6qYYznXU1AzbDRYm" %}
[For Investors](/user-guides/for-investors.md)
{% endcontent-ref %}

{% content-ref url="/pages/oD1fHVZhSbqL2HjWunpa" %}
[For Pool Managers](/user-guides/for-pool-managers.md)
{% endcontent-ref %}

{% content-ref url="/pages/IMAjfTm4YFFh68HCfZCC" %}
[Smart Contract Architecture](/technical-documentation/architecture.md)
{% endcontent-ref %}