Creating a vault

Once successfully onboarded, a portfolio manager can launch a new vault.

PMs can easily create a fund by clicking "Create New Portfolio" at https://app.truefi.io/managers. To test and demo the product, see the guide here: Credit Vault tutorial.

The TrueFi application walks PMs through the vault creation process, as shown in the demo below:

Demo of vault creation

Vault creation parameters and details

In vault creation, PMs are able to configure the following settings (among others):

• Capital formation rules

  • During the Capital Formation period, lenders can commit funds with assurance that the smart contract will return funds (with no fees) if certain requirements are not satisfied. For more details, read here.

    • Example: PM configures a 30 day capital formation period and minimum vault size of 1M USDC. If the fund has not raised ≥1M USDC by day 30, then principal will be returned to lenders with no fees taken. If the fund raises ≥1M USDC within 30 days, then the PM can move the vault to 'Live' status and deploy loans from the vault.

• Tranche configurations

  • Number of tranches: single tranche / 2 tranches / 3 thranches

  • Minimum subordination ratios for each tranche

  • For more details on tranche mechanics, read here.
• Vault duration / maturity date

  • Lender funds will be locked up until the vault's maturity date

  • All loans within the vault must mature before, or on the maturity date

• Fee structure

  • Vault fee: in basis points, on annualized basis

  • For more details on fees, read here.
• Lender permissions / restrictions

  • i.e. manager can require KYC or set custom list of allowed lenders

  • For more details on permissions, read here.