Protocol operates with 3 proxy pools and a single liquidity pool (single address) called Vault. All of which are codependent. Incentives for capital efficiency in these pools are dynamic and based on the protocol’s needs. The deposits from all 3 pools are directly transferred to the Vault.

These are the supported proxy pools:

Insurance Liquidity Pool (ILP)

The ILP has several crucial roles within our protocol. It acts as an insurance mechanism for the ST when defaults occur and the JT lacks the funds to cover losses. Additionally, It also allows holders of CICERO tokens to stake their assets to gain voting rights within the DAO.

Serion Tranche (ST)

The ST is a liquidity pool that covers the extra principal (80% of the loan size) required for loan origination once the JT target (20% of the loan size) is met. All deposits in the ST are insured by ILP. 

Junior Tranche (JT)

JT pool is used to kickstart the loan and cover the initial liquidity required for origination. Once a loan is created and approved, the minimum target of 20% of the loan size is immediately provided by JT with the ST following up with the remaining 80%.

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About Vault

The vault stores the balance of deposits coming from all 3 proxy pools on its address while keeping track of individual pool deposits independently. Users can always view the current balance collected from an individual pool.

In addition to deposits, the vault also tracks and stores the interest accrued by individual pools following the proportions defined by the governance.