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Repayment Flow ​

This diagram shows the complete flow when a borrower repays interest and/or principal via StructuredPool.

Process Overview ​

  1. Forced Interest Accrual - Calculate current interest debt
  2. Split Payment - Divide payment between interest and principal
  3. Pay Fees - Protocol and underwriter fees deducted from interest
  4. Route to Reserve - Transfer net amounts and update accounting

Key Points ​

  • Payment Priority: Interest is paid first, then principal
  • Fee Deduction: Protocol and underwriter fees are deducted from gross interest before distribution to LPs
  • Interest Increases Pool Value: Net interest payments increase virtualBalance, making LPs' shares worth more
  • Principal Restores Credit: Principal repayment reduces _outstandingDebt, allowing borrower to draw again
  • Direct Transfers: Fees go directly from payer to treasury/underwriter; net amounts to Reserve

Accounting Effects ​

Interest Payment ​

  • ✅ Protocol fee → Treasury (e.g., 5% of gross interest)
  • ✅ Underwriter fee → Underwriter (if underwriter exists)
  • ✅ Net interest increases virtualBalance (available for withdrawal)
  • ✅ Increases totalNetInterestEarned (performance metric)
  • ✅ Increases share price (LPs earn net returns)

Principal Payment ​

  • ✅ Decreases _outstandingDebt (borrower owes less)
  • ✅ Decreases virtualDeployed
  • ✅ Increases virtualBalance (capital back in pool)
  • ✅ Decreases outstandingDebt