> For the complete documentation index, see [llms.txt](https://docs.btcd.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.btcd.fi/the-vaults/architecture-common-to-both-vaults.md).

# Architecture (Common to Both Vaults)

Each vault follows the same six-step flow:

* User deposits the base asset (USD or BTC) into the vault.
* Vault converts the deposit into sBTCD.
* Vault deposits sBTCD as collateral into a lending market.
* Vault borrows the opposite asset against the sBTCD collateral.
* Borrowed asset is swapped into additional sBTCD.
* Additional sBTCD is added as collateral.

The final position is approximately 2× sBTCD exposure against 1× borrowed-asset debt at a target 50% LTV. The vault rebalances continuously to maintain the LTV target as BTC price moves.

The lending markets used by the vaults are Morpho isolated markets, with the USD Vault deployed via IPOR.

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