> For the complete documentation index, see [llms.txt](https://docs.covenant.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.covenant.finance/readme.md).

# Welcome

Covenant is a permissionless, fully on‑chain protocol for tranching risk on tokenized vaults. Any oracle-priced asset can be split into two fungible ERC‑20 claims: a senior debt tranche (Yield Coin) and a junior equity tranche (Leverage Coin). Both are fully collateralized against the underlying and redeemable on demand, with prices and the funding rate set continuously by an on‑chain market against the asset's net asset value.