> For the complete documentation index, see [llms.txt](https://venzofinance.gitbook.io/venzofinance-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://venzofinance.gitbook.io/venzofinance-docs/venzo-app/architecture/capital-flow.md). # Capital Flow The vault acts as the first point of control. Every downstream action depends on vault policy, strategy approval, and monitoring requirements. When a Liquidity Provider (LP) makes a deposit, the capital enters the secure vault and undergoes immediate security verification. If the policy checks fail, the transaction is rejected, paused, or flagged for review. If the policy checks pass, the capital becomes available for strategy allocation. The Whitelisted Strategy Manager then routes the capital to approved execution venues, which continuously generate NAV and proof updates for vault reporting. This flow is governed by **Creator-Bound Execution**, a core design principle that separates product governance from tactical execution across three layers: #### **1. Mandate and Intent Layer** The vault creator defines the intended risk and strategy envelope. This mandate dictates allowed assets, approved venues, permitted strategies, maximum allocation per strategy, maximum drawdown thresholds, leverage limits, liquidity requirements, minimum collateralization, redemption periods, and reporting cadences. #### **2. Separation of Concerns** The Strategy Manager is empowered to make tactical decisions, such as selecting which approved venue to use or how to rebalance within the mandate. However, the Strategy Manager cannot change the vault's accepted assets, bypass investor permissions, exceed allocation quotas, deploy to unapproved venues, alter redemption logic, change oracle policy, or remove emergency controls. #### **3. Automated Circuit Breakers** If the vault state breaches predefined boundaries, automated controls immediately pause deposits, withdrawals, allocation, or strategy execution. Triggers include NAV deviation beyond policy, collateralization dropping below minimum thresholds, stale oracle data, unauthorized strategy debt, allocation exceeding quotas, abnormal withdrawal pressure, signer quorum failures, suspicious transaction patterns, or emergency governance actions. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://venzofinance.gitbook.io/venzofinance-docs/venzo-app/architecture/capital-flow.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.