# Overview

The mechanism is analogous to a “Line of Credit”, where vault owners can deposit their collateral to receive a line of credit against it. This functionality enables a large amount of flexibility in otherwise rigid token positions.

### Protocol Functions

The Vault mechanism is composed of 5 primary parts: **Deposit**, **Withdraw**, **Mint**, **Repay**, and **Liquidate**.\
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In the **Deposit** stage, anyone can deposit their collateral into the protocol, represented as a “bundle”. Bundling assets uses their average interest rate and “Loan to Value” (LTV) in proportion, giving vaults the ability to mitigate volatile asset risk.

<figure><img src="https://279450839-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FFiyuxZGH4mVNtbbTs1KJ%2Fuploads%2Frbk3LSVfuxmKgSgHz70w%2Fimage.png?alt=media&#x26;token=1f12ca5c-1c5b-43fa-816a-5e23198f5162" alt=""><figcaption><p>With bundled positions, the minter avoids liquidation of both assets</p></figcaption></figure>

Vault owners can **Withdraw** collateral limited by the borrowable LTV

In the **Mint** stage, the owner can mint CDT up to the borrowable LTV

Anyone can **Repay** any outstanding CDT loans

If the LTV ratio exceeds maximum LTV (meaning there isn’t enough collateral to safely guarantee the backed value of the CDT assets), the vault will be available for **Liquidation**.