[ Documentation · 03 / 08 ]

Risk tiers

R1 Sovereign to R5 Frontier

Every vault carries exactly one tier, and it is stated on every surface the vault appears on. What each tier means in practice, what a member is accepting at each level, and how a tier is assigned.

Five tiers

One per vault

Moved only by governance

01

The five tiers

Five tiers. Every vault carries exactly one, and it is stated on every surface the vault appears on — the index row, the deep-dive hero, the card in the featured band, the previous and next links at the foot of a vault page. There is no view of a vault that does not show its tier.

R1

Sovereign

Reserve-grade. Cash-equivalent, never gated, first to settle.

Reserve

R2

Senior

Hedged or late-stage. Predictable mark.

Anchor · Shield

R3

Balanced

Mixed stage, moderate concentration.

Perpetual · Structure · Compound

R4

Directional

Concentrated or momentum-led. Drawdown expected.

Keystone · Momentum

R5

Frontier

Earliest stage, longest hold. Uncapped upside, uncapped loss.

Frontier · Genesis

The scale describes what a member is exposed to. It is not a prediction and it is not a confidence rating. A low tier is not a promise of return — Reserve sits at R1 and is marked at 1.02×, which is as high as it will ever be marked. A high tier is not a warning that a vault is performing badly — Genesis sits at R5 and carries the strongest mark in the book at 2.74×.

02

What you are accepting

What each tier commits a member to, in the terms that matter when it goes wrong.

R1

Sovereign

1 vault · $132.7M · 6.8% of the book

You are accepting the credit of the issuer of a tokenised bill and nothing else. There is no company risk in this tier because Reserve owns no company — it is 82% cash and 18% bills.

The upside is the bill yield. Reserve is marked at 1.02× and will never be marked higher. No gate has ever been applied to it and none can be applied without a governance vote published a full epoch in advance. In the March drawdown the House drew $41.0M out of Reserve in four days and every call settled at par.

R2

Senior

2 vaults · $554.4M · 28.6% of the book

You are accepting timing rather than survival. Anchor's six companies are past product risk and inside two years of a plausible listing; the return depends on the window they list into rather than on whether they make it. A closed market pushes the whole book out four to six quarters, and the 24-month lock-up exists so that a member cannot force a sale into that window.

Shield's residual exposure is basis. It sells a public technology index against all four of its holdings, which costs roughly 4.2% a year in carry and caps the upside on purpose. A private mark and a public index do not move together, so in a dispersion event the hedge can lose on both legs.

R3

Balanced

3 vaults · $637.2M · 32.8% of the book

You are accepting duration rather than direction. Capital in Perpetual is committed for as long as the company stays private, the weighted holding period is 4.1 years, and there is no scheduled liquidity of any kind. Members who need a date should be in Anchor or Reserve, and the vault says so on the way in.

Structure's exposure is the capital stack. A liquidation preference is only worth what the estate can pay, and two of its positions have been carried flat since entry because no round has repriced them. Compound is rated here on the positions it holds, not on the fact that it is funded only by realised gains.

R4

Directional

2 vaults · $453.6M · 23.4% of the book

You are accepting drawdown as an expected outcome rather than a failure. Keystone holds exactly ten positions, so a single write-down moves the whole vault: a total loss on its largest holding would take 11.4% off vault equity in one epoch. That figure is published and recomputed every time the book changes.

Momentum turns over, pays fees and takes the wrong side sometimes. It has taken two down rounds since Epoch 02, the worse of them 22% on a single position, and both are still held. Its maximum drawdown to date is 9.4% of vault equity, recovered inside two epochs. If primaries stop repricing upward the strategy has no entry at all.

R5

Frontier

2 vaults · $162.1M · 8.4% of the book

You are accepting that positions in this tier can return nothing, and that some are expected to. Genesis holds six positions written before a public price existed and expects two of them to be worth zero. That is the base case, not the failure case.

Frontier's companies fail on physics and on permits rather than on product-market fit. A reactor that does not reach net power is worth its scrap and its patents; a robotics programme that misses a customer milestone reprices 60% in a single round. The lock-up is 60 months and it is real — there is no secondary market of any depth for most of this book.

03

How a tier is assigned

A tier is a property of the mandate, not of a quarter's performance. It is set when the vault opens and it moves only by governance vote published a full epoch in advance. A tier that could be reclassified quietly would be worth nothing, so it cannot be.

FactorEffect on the tier
StageEarlier is higher. Genesis writes before a price exists and is R5; Anchor requires audited revenue above $200M and is R2.
HedgeA proved hedge lowers the tier. Shield holds the same class of asset as Anchor, sells the index against it and attests net exposure every block, so it is rated R2 rather than R3.
ConcentrationFewer positions is higher. Keystone's ten names put it in R4 despite holding companies that also sit in R2 vaults.
DurationLonger commitment is higher. A 60- or 84-month lock-up with no secondary market behind it is a different instrument from an 18-month one.

What does not decide it: the mark, the names in the book, or how the vault has done. Keystone and Anchor hold several of the same companies — Anduril, Groq, Perplexity, Ramp, Mistral, Vercel — and sit two tiers apart, because Keystone holds ten positions on a 48-month lock-up and Anchor holds six on a 24-month one. The tier reflects the structure, not the roster.

04

Isolation

A loss inside a vault is contained by that vault. This is the single most important structural property of the book and it is worth stating in full.

  • No vault can reach another. A write-down in Genesis cannot reach Reserve, cannot reach Anchor and cannot trigger a gate anywhere else in the House. There is no cross-margining and no netting between books.
  • No vault borrows. Not from another vault, not from outside. There is no leverage at the House level, so there is no mechanism by which one vault's loss becomes another's margin call.
  • Reserve is not a backstop for losses. It funds redemptions and follow-ons out of cash it actually holds. It does not absorb another vault's write-down, and a member in Reserve is not underwriting anybody.
  • One protection runs the other way. Compound is funded only by realised gains, so a loss there cannot touch member principal — every dollar in it was a gain before it was a position. It is still rated R3 on the exposure it actually holds, because that protection is about whose money it is, not about how the positions behave.

Sizing is the second control, and it is applied before the risk is taken rather than after. Genesis is sized so that a total loss costs the House 2.2% of deployed capital. Frontier caps any single position at 24% of the vault and the whole vault is 6.1% of capital deployed. Keystone publishes its concentration number rather than modelling it away.

What isolation does not do

Isolation limits contagion between vaults. It does not limit loss inside the vault a member actually holds. If you allocate to Genesis and two of its six positions return nothing, that loss is yours in full — the fact that it could not reach Anchor is no comfort to somebody who is not in Anchor. Diversification across tiers is a decision each member makes at allocation, and nothing in the structure makes it for them.

05

Distribution

The book is weighted to the middle. That is deliberate: a book where every tier holds the same weight is a book nobody underwrote.

TierNameVaultsDeployedShare

R1

Sovereign1$132.7M6.8%

R2

Senior2$554.4M28.6%

R3

Balanced3$637.2M32.8%

R4

Directional2$453.6M23.4%

R5

Frontier2$162.1M8.4%

61.4% of deployed capital sits in R2 and R3. The two R5 vaults together hold 8.4%, which is what makes their base case survivable at the level of the whole book — and irrelevant at the level of a member who is only in them.

06

Reading the ramp

Each tier carries a colour, and the risk ramp is the only place this site uses colour beyond its single accent. R1 is the brand lime and the ramp runs warm through amber to red at R5.

R1

Sovereign

Reserve-grade. Cash-equivalent, never gated, first to settle.

#C6FF00

R2

Senior

Hedged or late-stage. Predictable mark.

#E8E64A

R3

Balanced

Mixed stage, moderate concentration.

#FFC53D

R4

Directional

Concentrated or momentum-led. Drawdown expected.

#FF8A3D

R5

Frontier

Earliest stage, longest hold. Uncapped upside, uncapped loss.

#FF5140

It is a hue ramp rather than five tints of one colour because a tier is read off a 3px bar or a small badge at a glance, and five tints separated only by brightness are not recoverable at that size. Running from lime to red also matches the direction of the reading: R1 is reserve-grade, R5 is uncapped loss.

The colour is an aid and never the statement. Every surface that shows a tier colour also shows the tier code and the tier name, so nothing on this site requires a reader to tell amber from orange. If you can only see one of the three, the code is the one that matters.

The tiers as they appear across the book are on the vault index, sorted by tier. The mandate behind each one is in Vaults.