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

# How it works

> A step-by-step look at how your funds flow through Byzantine Prime.

Byzantine Prime works by lending your cash to well-secured borrowers. Interest accrues daily, and your money is always available for withdrawal. Unlike traditional products, all of this happens automatically and transparently, with no intermediary holding your money and no business hours.

## The flow of funds

<Steps>
  <Step title="Strategy creation">
    Before any deposits are accepted, Keyrock, our regulated partner acting as strategy curator, programs the investment strategy directly into the Byzantine Prime smart contract. This strategy defines exactly which lending markets capital can flow into, the maximum loan-to-value ratios allowed, the types of collateral accepted, and how to rebalance. Once written, these rules cannot be changed unilaterally by anyone.
  </Step>

  <Step title="Deposit">
    You transfer funds to your unique account. If depositing in fiat (EUR or USD), a regulated on-ramp partner converts them into stablecoins (EURC or USDC - digital euros and dollars backed 1:1 by real reserves). If depositing in stablecoins directly, they flow in immediately.
  </Step>

  <Step title="Automatic deployment">
    As part of the same deposit transaction, your assets flow directly into the underlying lending markets (Morpho, Aave, Maker/Sky) according to Keyrock's strategy. The Byzantine Prime smart contract does not hold your assets - it routes them automatically, acting as an automated fund registrar rather than a custodian.
  </Step>

  <Step title="Receipt tokens issued">
    The smart contract issues you receipt tokens representing your share of the product - think of them as digital deposit slips showing how much of the product belongs to you. These tokens are held in your own account and are the cryptographic proof of your ownership. The contract's security audits exist primarily to guarantee the accuracy of this accounting.
  </Step>

  <Step title="Borrowers take loans">
    Immediately after deployment, your assets become available for borrowing on the lending markets. Borrowers - typically market makers, arbitrage traders, and institutional funds - post digital asset collateral worth 120–150% of the amount they wish to borrow, then draw on the available liquidity. For more on who borrows and why, see [Digital credit & overcollateralisation](/documentation/digital-assets-101/what-is-digital-credit).
  </Step>

  <Step title="Interest accrues in real time">
    As borrowers take loans, they pay interest continuously. Interest rates are set algorithmically by each market based on supply and demand - when more of the pool is borrowed, rates rise; when borrowing is lower, rates fall. This interest flows directly to depositors and is credited to your account in real time, every few seconds.
  </Step>

  <Step title="Withdrawal">
    You can withdraw at any time. The smart contract unwinds your share from the lending markets and returns the stablecoins to your account, all within under a minute under normal conditions. Your original deposit plus all accrued interest is available immediately, with no lock-ups or redemption windows.
  </Step>
</Steps>

## Who controls what

Byzantine Prime is structured so that no single party - not Byzantine, not Keyrock, not any borrower - has unilateral access to your funds.

<Columns cols={2}>
  <Card title="You (the investor)" icon="user-tie" iconType="solid" color="#cd55b7">
    **Role:** Provide capital and withdraw on demand

    **Control:** Can deposit and withdraw your own funds at any time

    **Safeguard:** No access to other investors' positions; funds held in your own account
  </Card>

  <Card title="Byzantine Prime protocol" icon="database" iconType="solid" color="#cd55b7">
    **Role:** Executes the strategy automatically

    **Control:** Cannot move funds outside the pre-approved lending venues

    **Safeguard:** Rules are immutable once deployed - not even Byzantine can change them
  </Card>

  <Card title="Keyrock (strategy curator)" icon="globe" iconType="solid" color="#cd55b7">
    **Role:** Sets and maintains the investment strategy

    **Control:** No direct access to investor funds; can only adjust strategy parameters within mandate

    **Safeguard:** Protocol logic prevents any action outside the permitted universe of markets
  </Card>

  <Card title="Underlying lending markets" icon="store" iconType="solid" color="#cd55b7">
    **Role:** Match borrowers with lenders; manage collateral and liquidations

    **Control:** No direct access to investor funds

    **Safeguard:** Collateralisation enforced by their own protocol logic, independently of Byzantine
  </Card>
</Columns>

## How assets are segregated

Your assets are never pooled with non-verified depositors. The receipt tokens representing your position are held exclusively in your own account - either a self-custodial account you connected, or the account Byzantine created for you during onboarding. At no point are funds held on a corporate balance sheet or exposed to any party's operational discretion.

All balances, positions, and interest flows are publicly auditable on the blockchain at any time, giving you the equivalent of real-time proof of reserves. You can verify your balance directly through the Byzantine dashboard or via the API.

## What can move your assets

Funds can only move in three ways, all governed by pre-defined, immutable smart-contract logic:

1. **Your deposit or withdrawal** - initiated by you, authorised by your passkey signature
2. **Automated interest distribution** - credited directly to your position by the smart contract
3. **Strategy rebalancing** - Keyrock shifting capital between pre-approved lending markets, within the strict parameters of their mandate

Nothing else can move your assets. There are no emergency overrides, no admin keys that unlock funds, and no discretionary powers granted to any party.