> ## Documentation Index
> Fetch the complete documentation index at: https://docs.berafarm.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Architecture Overview

> A top-to-bottom map of how a Berafarm vault works: shares, tranches, waterfall settlement, strategies, auto-compounding yield, and fees.

***

This page is the map of how a Berafarm vault works, end to end. Every subsystem shown here has its own page with full mechanics, start here, then go as deep as you need.

<Frame>
  <img src="https://2385003699-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FPo02LJL75w7rpFz7RqvS%2Fuploads%2FqVihbsudZV97QQPjpkBJ%2FWhatsApp%20Image%202026-07-06%20at%205.10.35%20PM.jpeg?alt=media&token=1a96a87e-c363-4d8c-abcc-e7937feee2d5" alt="" width="563" />
</Frame>

***

#### Top-to-Bottom Diagram

**You deposit, you receive a share token.** Assets go in, a tranche share token comes back in the same transaction, your on-chain proof of the position. Which token you receive depends on the tranche you chose: Stable or Alpha. Deployment is atomic, so your capital is inside live strategies from the moment you deposit, and withdrawals unwind just as instantly - no epochs, no queues. → [\[Deposits & Withdrawals\]](/deposits-and-withdrawals)

**One vault, two tranches.** Both tranches sit inside the same vault, funding the same pool of capital and the same strategies. What separates them is accounting: each tranche has its own share token with its own share price, and the difference between the two prices over time is the risk tranching at work. → [\[Share Tokens & NAV\]](/share-token-and-nav)

**The waterfall divides every outcome.** Whenever the vault's balance changes, the waterfall settles: profit pays Stable's target first and routes the residual to Alpha; losses hit Alpha first and reach Stable only if Alpha is exhausted. Settlement runs continuously - on every deposit, withdrawal, and keeper update. → [\[The Tranche Waterfall\]](/the-tranche-waterfall), with worked numbers in [\[Tranche Scenario Maths\]](/tranche-scenario-maths)

**Capital works across strategy sleeves.** The vault deploys across lending markets, concentrated liquidity positions, whitelisted external vaults, and PoL staking. The allocation between sleeves is not fixed - the team reviews, backtests, and rotates it weekly, within published position limits and whitelist rules. → [\[Strategy Framework\]](/strategy-framework)

**Yield loops back automatically.** Staked positions earn PoL emissions (BGT, received as iBGT via Infrared) alongside trading fees, lending interest, and external vault returns. Every harvest converts rewards into strategy assets and redeploys them. You never claim anything -your tranche's share price simply rises. → [\[Yield & Auto-Compounding\]](/yield-and-auto-compounding)

**Fees are structural, not extractive.** Entry and time-windowed exit fees are charged per transaction; performance fees accrue as shares minted to the treasury, so capital never leaves the strategies to pay them, and the protocol's revenue carries the same exposure your deposit does. → [\[Berafarm Fee Module\]](/berafarm-fee)

***

> *One actively managed pool of capital, two risk profiles carved out of it by a continuously-settled waterfall - with every allocation, harvest, and fee visible on-chain.*