How LiquitX structures receivables on-chain: Senior and Junior tranches, risk vaults, per-asset StableSwap markets, waterfall distribution, and oracle risk scoring.
LiquitX turns individual receivables into structured on-chain assets. This page summarizes the architecture as deployed today on the Base Sepolia testnet.
Each asset issues two tranche tokens. The Senior tranche has payment priority. The Junior tranche is first-loss capital and is held in escrow for the life of the asset, absorbing losses before the Senior tranche is touched.
Risk vaults hold lxToken deposits organized by risk bucket (AAA, AA, A). A deposit in a vault takes diversified exposure to the assets rated into that bucket instead of a position in a single asset.
Each asset has its own StableSwap market where liquidity providers trade its Senior tranche tokens (sr-tokens) against lxTokens. The invariant concentrates liquidity near expected value while still letting the price move on new information.
At settlement, proceeds flow through a contractual waterfall: the Senior tranche is paid first, and the Junior tranche takes the residual of whatever is recovered. The ordering is enforced by the settlement contracts, not by an off-chain agreement.
Before an asset is funded, an oracle process scores its risk. That score feeds the rating which places the asset in a risk bucket and governs how vaults may allocate to it.
lxTokens are the protocol's settlement tokens and are minted per currency, with reserves segregated by currency market. Assets settle in the currency in which they were originated.
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