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

# How the vault works

> Deposit USDC from your own wallet into an on-chain credit vault.

The vault runs on Pareto and Royco smart contracts on Ethereum. You deposit USDC from your own wallet and receive Bedrock, Senior or Junior [shares](https://docs.blockhouse.app/reference/glossary.md#shares) in return, with no Blockhouse login needed.

Blockhouse is not a party to the credit facility and doesn't take custody of deposits. The vault's contracts are listed on its page under **Technical specifications**.

**1. Get ready**

See [Before you deposit](https://docs.blockhouse.app/vaults/before-you-deposit.md).

**2. Connect and accept the terms**

See [Connect a wallet](https://docs.blockhouse.app/vaults/connect-a-wallet.md) and [Accept the terms](https://docs.blockhouse.app/vaults/accept-the-terms.md).

**3. Verify once with Keyring**

Pareto requires KYC/KYB through Keyring before a wallet can deposit. You verify once per wallet, and renew when the credential expires. See [Verify with Keyring](https://docs.blockhouse.app/vaults/verify-with-keyring.md).

**4. Deposit**

See [Deposit](https://docs.blockhouse.app/vaults/deposit.md).

## Positions

| Position | What it is |
| - | - |
| **Base** | Standard credit: your USDC goes into the Bedrock vault and earns a fixed rate, paid into the share price each cycle. |
| **Senior** | A protected tranche, powered by Royco, with a lower APY in exchange for first-loss protection. See [Senior and Junior tranches](https://docs.blockhouse.app/vaults/senior-and-junior.md). |
| **Junior** | A first-loss tranche, powered by Royco, with a higher APY: Senior holders pay Junior holders a premium for taking the first loss. |

The vault page shows the current APY of each.

## Withdrawing

The vault lends in [cycles](https://docs.blockhouse.app/reference/glossary.md#cycle). You request a withdrawal between cycles and claim the USDC when the next one completes. See [Withdraw and claim](https://docs.blockhouse.app/vaults/withdraw-and-claim.md).


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