Curate

Premium control

The toggle on the deploy form decides who can set the senior-to-junior premium rate after launch: curator-managed for full control, protocol-managed to delegate.

What the premium is

A continuous rate that senior lenders pay to junior lenders, set in % per year. It's the price senior pays for being protected against the first slice of any loss.

Some examples on a vault earning 5% / year:

Premium	Senior earns	Junior earns	What it feels like
0.5% / yr	~4.5%	~7%	Senior keeps almost all the underlying yield. Junior gets a small kicker for taking first-loss.
2% / yr	~3%	~13%	Mid-range. Senior trades a meaningful cut for protection; junior is well-paid.
5% / yr	~0%	~25%	Senior gives up all the underlying yield. Junior is highly leveraged.

(Junior numbers assume the vault is at the maximum 4× senior-to-junior leverage. At lower leverage junior earns proportionally less.)

The premium isn't a fee anyone takes. It flows directly from one tranche to the other. The protocol fee is separate and is fixed at 5% of profits by default.

The toggle on the deploy form

When you deploy, you pick one of two:

Curator manages premium

You hold the lever. After launch you can change the rate whenever you want, subject to the timelock.

Pick this if:

You want to react to market conditions e.g. stress events or liquidity shifts without waiting on anyone else.
You're targeting a specific junior IRR profile and need to defend it.
You're comfortable being the contact point for premium-rate questions from your lenders.

Protocol manages premium

LayerCover holds the lever. We adjust it as part of our protocol governance, alongside other vaults we operate.

Pick this if:

You want a low-touch, predictable product for senior lenders who care more about yield stability than fine-grained tuning.
You don't want to be on call for premium-rate decisions.
You're happy operating alongside other LayerCover vaults with consistent parameter governance.

LPs always get a chance to exit before a rate change. Protocol-managed premium routes through an on-chain timelock whose minimum delay equals the junior withdrawal notice (10 days). Any new rate is visible as a CallScheduled event on the timelock the moment we queue it, and junior LPs who disagree have the full notice window to file a withdrawal and exit at the old rate before the change executes.