> 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/resources/faq.md). # FAQ ## General ### What is Trilobyte? Trilobyte is a decentralised lending protocol built on Stellar's Soroban smart contract platform. It connects businesses that need working capital with investors who earn yield from loan repayments, split across a senior and a junior risk tranche. ### Is Trilobyte live? Trilobyte is currently deployed on **Stellar Testnet** and undergoing auditing. Mainnet launch has not been announced yet. ### What blockchain does Trilobyte run on? Trilobyte runs on **Stellar** using the **Soroban** smart contract platform. It leverages Stellar's low fees, fast finality, and SEP-41 token standard. ### Is the code open source? Yes. The smart contracts are written in Rust and built with OpenZeppelin Stellar Contracts v0.7.2 for battle-tested security. ### Why does Trilobyte have two tranches? Splitting investors into senior and junior lets the protocol offer a lower-risk, lower-yield option (senior) protected by a first-loss layer (junior), rather than every investor sharing every loss equally. See [Tranches and the Waterfall](/overview/tranches-and-the-waterfall.md). *** ## For Investors ### How do I earn yield? You earn yield by depositing funds into a vault's senior or junior tranche during its RaisingFunds phase. As the borrower makes repayments, each period's interest and principal is allocated through a six-bucket waterfall into the two tranches' pools. You can claim your own tranche's pro-rata share at any time. ### What's the difference between senior and junior? Senior is paid first every period and only loses money once junior is completely wiped out; it earns a lower, steadier yield. Junior is paid last, absorbs losses first, and earns a spread on top of its own interest rate as compensation. Senior can't be funded until the manager locks the junior tranche. ### What are debt tokens (tVLT)? When you deposit into a vault, you receive Trilobyte Vault Tokens (tVLT) 1:1 with your **net** deposit (after the 0.5% protocol fee). These are SEP-41 fungible tokens that represent your position and are **non-transferable**. Your tranche identity is tracked separately from the token itself, since the token is minted the same way regardless of tranche. ### Can I withdraw my deposit? Senior deposits can be withdrawn any time before the vault is fully funded. Junior deposits can only be withdrawn before the manager calls `lock_junior` — once locked, junior capital is committed (though new junior deposits can still be added). Once the vault transitions to AwaitingApproval, no withdrawals are possible; if the vault later misses a deadline and moves to Cancelled, you pull your own refund instead. ### What happens if the borrower defaults? Recoveries pay out strictly senior-first: senior principal, then senior's unpaid interest, then junior principal, then junior's unpaid interest, then any residual. The pool comes from any borrower collateral pledge (seized first) and the manager's slashed collateral. Junior may recover very little or nothing; senior may also not recover in full if losses are severe enough. ### Are there fees? A **0.5% protocol fee** is taken from every deposit, in either tranche, and sent to the treasury. On repayments, the protocol instead takes a **reserve fee** — a governed share of each period's interest (default 10%) — as the most senior bucket in the waterfall, before either tranche is paid. Separately, a borrower who misses a payment can be charged a governed late fee (default 18%/yr), collected through the waterfall against the senior/junior arrears. *** ## For Borrowers ### How do I get a loan? Work with an approved Pool Manager who will evaluate your business, structure the loan terms (including the leverage ratio that sizes the two tranches), and create a vault on your behalf. The loan terms are negotiated off-chain and then encoded into a smart contract. The manager can never be your borrower's own address. ### What happens if I miss a payment? The Pool Manager can apply a governed late fee (default 18% p.a.). If you miss payments beyond the **grace period** (default 30 days), anyone can trigger default — which slashes the manager's collateral (and seizes any collateral you pledged) into a recovery pool paid out senior-first. You also cannot withdraw from your cash pool while you have a missed payment outstanding. ### Can I renegotiate my loan? Yes. Your Pool Manager can propose new terms (interest rate and/or loan term), bounded by protocol-wide limits including how far a single round can cut your current rate. **Approving now requires your own sign-off, not just the manager's** — both of you must authorize the change. If approved, the shared installment is recalculated on the remaining outstanding principal. ### What is the cash pool? Your cash pool is whatever remains after each repayment has passed through the six-bucket waterfall — the reserve fee, senior interest and principal, and junior interest and principal are all paid first. You can withdraw from it at any time you're current on payments, during the Active or FullyRepaid phases. *** ## For Pool Managers ### How do I become a Pool Manager? You must be approved by the protocol's Operations Admin. They register your address and assign a credit limit that caps your total outstanding principal. ### What is collateral and why do I need it? You must deposit collateral before creating vaults, in an asset on Globals' collateral whitelist. This collateral is the anchor of each vault's junior tranche and is your "skin in the game" — it's slashed first (ahead of the tranches, but behind any borrower pledge) if a vault defaults. ### What happens if a vault defaults? Your locked collateral for that vault is slashed into the vault's recovery pool, you are flagged as delinquent, and you are blocked from creating new vaults. Only an Operations Admin can clear your delinquency after review. ### What is a credit limit, and are there other exposure limits? Your credit limit caps your total outstanding principal across all your active vaults, set by the Operations Admin. Separately, the protocol enforces borrower and manager exposure caps as a share of total outstanding principal protocol-wide, and a related-party rule that blocks a manager from ever being their own borrower. *** ## Technical ### What token standard does Trilobyte use? Debt tokens follow the **SEP-41** standard — Stellar's native fungible token specification. The vault contract implements the `FungibleToken` and `FungibleBurnable` traits from OpenZeppelin. ### How is the installment calculated? Using the standard amortisation formula with integer-only math (Soroban has no floats). Internal precision uses 10¹² scaling, and the final installment is ceiling-rounded. Each period, the installment's interest and principal are then split across the six waterfall buckets rather than a fixed ratio. ### What is the day-count convention? Trilobyte uses **30/360** — each month is treated as 30 days. This is standard in traditional finance. ### What security modules are used? Trilobyte uses OpenZeppelin Stellar Contracts v0.7.2: * **Access Control** — Role-based permissions * **Pausable** — Emergency circuit breaker (wind-down paths stay reachable even while paused) * **Upgradeable** — Governor-authorised contract upgrades, hardenable to require the Timelock * **FungibleToken** — SEP-41 debt tokens * **TimelockController** — Governance delay ### Is there an optional compliance layer? Yes — Globals can point at a compliance-gate contract implementing a single `is_allowed(who, action)` check, applied to investing, borrowing, and vault creation. When unset, every check passes and a permissioned vault's own allowlist is the only investor-side gate. See [Covenants, Exposure and Compliance](/protocol-mechanics/covenants-exposure-and-compliance.md). *As of September 2026.*