> 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/user-guides/for-investors.md).

# For Investors

This guide explains how investors participate in Trilobyte to earn yield from real-world lending, in one of two risk tranches.

## How Investing Works

Investors earn yield by funding loans through Trilobyte Vaults, choosing to fund the **senior** or **junior** tranche of a given vault (see [Tranches and the Waterfall](/overview/tranches-and-the-waterfall.md)). When you deposit funds, you receive **SEP-41 debt tokens** representing your position in that tranche. As the borrower makes repayments, you can claim your proportional share of your tranche's yield.

## Choosing a Tranche

|                        | Senior                                     | Junior                                               |
| ---------------------- | ------------------------------------------ | ---------------------------------------------------- |
| Paid                   | First, every period                        | Last, every period                                   |
| Loses                  | Last, and only once junior is wiped out    | First                                                |
| Yield                  | Lower, steadier                            | Higher — earns a spread taken from senior's interest |
| Opens                  | Only after the manager calls `lock_junior` | First — alongside the manager's own collateral       |
| Who typically funds it | Wallet users, external liquidity providers | The manager's collateral, plus junior investors      |

An investor may hold a position in **both** tranches of the same vault — each is tracked as a separate position.

## Depositing

### 1. Find a Vault

Browse available vaults in the **RaisingFunds** phase. Each vault displays its terms:

* **Principal** — Total loan amount being raised
* **Interest rate** — Annual rate the borrower pays
* **Loan term** — Duration in months
* **Leverage ratio** — Senior capital as a multiple of junior — determines each tranche's size and risk
* **Junior spread / reserve fee** — What junior earns from senior, and what the protocol takes from interest before either tranche
* **Pool Manager** — Who underwrote the deal
* **Related party** — Whether the deal is flagged as related-party
* **Funding deadline** — When funding must be completed (if set)
* **Permissioned** — Whether the vault requires allowlisting

### 2. Deposit Funds

Call `deposit(investor, amount, tranche)` to fund the vault in your chosen tranche:

* Senior deposits are only accepted after the manager has called `lock_junior`
* A **0.5% protocol fee** is deducted from your deposit
* You receive debt tokens (tVLT) 1:1 with the **net** amount — so a 10,000 USDC deposit mints 9,950 tVLT
* Your deposit must meet the vault's **minimum investment** floor (default 100 USDC) — a dust deposit is rejected
* Your deposit is tracked individually, per tranche, in the vault

{% hint style="info" %}
The protocol reserve fee on repayments is charged before either tranche is paid — it does not come out of your yield after the fact. See [Fees](/protocol-mechanics/fees.md).
{% endhint %}

{% hint style="info" %}
For **permissioned vaults**, you must be on the Pool Manager's allowlist before you can deposit. If the protocol has a compliance gate configured, that check applies too — contact the manager to request access.
{% endhint %}

### 3. Withdraw Before Funding Completes

If the vault hasn't been fully funded yet, you can withdraw your deposit:

* Call `withdraw(investor, amount, tranche)` to get your funds back
* **Senior** withdrawals are allowed at any point during RaisingFunds
* **Junior** withdrawals are only allowed **before** the manager calls `lock_junior` — once locked, junior capital cannot be withdrawn (deposits can still be added, just not withdrawn)
* Your debt tokens are burned proportionally

{% hint style="warning" %}
Once the vault is fully funded and transitions to AwaitingApproval, you can no longer withdraw. Your funds are committed. If the vault instead misses its funding or approval deadline, it moves to Cancelled and you pull your own refund with `claim_refund` — see [Cancelled](/protocol-mechanics/vault-lifecycle/cancelled.md).
{% endhint %}

## Debt Tokens (tVLT)

When you deposit, you receive **Trilobyte Vault Tokens (tVLT)** — SEP-41 compliant fungible tokens:

| Property         | Value                                                                                                  |
| ---------------- | ------------------------------------------------------------------------------------------------------ |
| **Name**         | Trilobyte Vault Token                                                                                  |
| **Symbol**       | tVLT                                                                                                   |
| **Decimals**     | 7                                                                                                      |
| **Standard**     | SEP-41 (Stellar fungible token)                                                                        |
| **Cap**          | Equal to the vault's principal                                                                         |
| **Transferable** | **No** — tVLT is non-transferable (it represents your own position; `transfer`/`approve` are disabled) |

Debt tokens are minted 1:1 regardless of tranche — your **tranche identity lives in your `InvestorPosition`**, not in the token itself, so your balance alone doesn't tell you which tranche you're in.

{% hint style="warning" %}
**Debt tokens are non-transferable.** You cannot transfer, sell, or delegate your debt tokens to another address. The `transfer`, `transfer_from`, and `approve` functions are disabled. This ensures that yield claims remain tied to the original depositor.
{% endhint %}

## Earning Yield

### How Yield Accumulates

As the borrower makes repayments, each period's interest and principal are allocated through the six-bucket waterfall. Senior's pool fills from buckets 2–3, junior's from buckets 4–5 — see [Payments & the Waterfall](/protocol-mechanics/payments-and-emi.md).

### Claiming Yield

Call `claim_yield(investor, tranche)` to claim your share of **your own tranche's** pool:

$$
\text{claimable} = \frac{\text{your deposit in tranche}}{\text{tranche total raised}} \times \text{tranche pool} - \text{already claimed}
$$

* You can claim at any time during the **Active** or **FullyRepaid** phases
* Claims are cumulative — you receive the difference between your total entitlement and what you've already claimed
* You don't need to claim after every payment — yield accumulates
* A senior position never draws from junior's pool, or vice versa

### If the loan defaults

Recoveries pay out senior first: senior principal, then senior's unpaid interest, then junior principal, then junior's unpaid interest, then any residual. Call `claim_recovery(investor, tranche)` once the manager or anyone has called `distribute_recovery()`. **Junior recovers nothing until senior is fully covered.** See [Default & Risk Management](/protocol-mechanics/default-and-risk-management.md).

## Monitoring Your Investment

Track your vault's performance using query functions:

| Function                                                | What It Shows                                                                  |
| ------------------------------------------------------- | ------------------------------------------------------------------------------ |
| `get_config()`                                          | Vault terms and current phase, including leverage ratio and related-party flag |
| `get_position(investor, tranche)`                       | Your deposit, claimed interest, and claimed principal in that tranche          |
| `get_claimable(investor, tranche)`                      | Available yield to claim in that tranche                                       |
| `balance(account)`                                      | Your total debt token balance (across both tranches)                           |
| `get_payments_made()`                                   | How many periods the borrower has fully paid                                   |
| `get_outstanding_senior()` / `get_outstanding_junior()` | Remaining principal per tranche                                                |
| `get_arrears()`                                         | Any carried shortfall, per bucket                                              |
| `get_next_due()`                                        | Next payment due date                                                          |
| `get_missed_payments()`                                 | Consecutive missed payments                                                    |
| `get_senior_nav()` / `get_junior_nav()`                 | NAV after any write-down — an early warning signal                             |
| `get_covenant_status()`                                 | Whether the borrower is current and reporting is up to date                    |
| `get_late_fees()`                                       | Accumulated late fees                                                          |

## Risk Awareness

### What Protects You

* **Manager collateral** — anchors the junior tranche and is slashed first on default
* **The junior tranche itself** — senior only loses once junior is exhausted
* **Optional borrower collateral** — seized ahead of manager collateral in the recovery order
* **Exposure caps and the related-party rule** — cap concentration and prevent a manager from being their own borrower
* **Delinquency tracking** — Managers with defaults are blocked from new vaults
* **Credit limits** — Cap each manager's total exposure
* **Grace period and NAV write-down** — Time buffer and an early-warning signal before formal default
* **Permissionless default trigger** — Anyone can trigger default, preventing collusion
* **Funding/approval deadlines** — Prevent indefinite capital lock-up, with self-service refunds

### What to Watch For

* **Missed payments** — Check `get_missed_payments()` and `get_covenant_status()` regularly
* **NAV write-down** — A non-zero write-down on `get_senior_nav()`/`get_junior_nav()` signals distress before formal default
* **Late fees** — Rising late fees signal borrower distress
* **Phase changes** — Monitor for transitions to Renegotiation or Defaulted

{% hint style="danger" %}
**Lending carries risk.** If the borrower defaults, junior absorbs the first loss and manager (then borrower) collateral provides further recovery — but senior may still not recover its full deposit, and junior may recover very little or nothing. Evaluate each vault's leverage ratio, terms, and Pool Manager track record carefully before investing.
{% endhint %}

*As of September 2026.*