> For the complete documentation index, see [llms.txt](https://resources.vaults.sentora.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://resources.vaults.sentora.com/direct-vaults/direct-vault-setup-and-infra-overview.md).

# Direct Vault Setup & Infra Overview

## What is a Direct Vault?

Direct Vaults implement single layer strategies, where deposited assets are allocated directly into underlying DeFi protocols to generate yield. The vault simply routes liquidity into target markets where yield is generated from borrower demand.

Because of this simplified architecture, Direct Vaults generally have lower structural risk and more predictable return profiles. However, they may produce lower returns compared to structured strategies.

## Direct Vault Architecture

At a high level, the architecture of a Direct Vault can be broken into four layers.

#### **User deposit layer**

The user deposits the vault’s supported asset into the vault contract. For example, a PYUSD vault on Morpho accepts PYUSD as the deposit token.

#### **Share accounting layer**

In exchange for the deposit, the user receives a receipt token or share representation that tracks proportional ownership of the vault’s assets and accrued yield.

#### **Allocation layer**

The vault allocates deposited assets into the selected protocol or strategy venue. For a lending oriented direct vault, this usually means depositing assets into a lending market.

#### **Yield accrual layer**

Yield generated by the underlying strategy accrues back to the vault and is reflected in the value of the receipt token or user share balance.

The key characteristic of this architecture is that it remains single-strategy and relatively linear. There is no separate debt leg, recursive loop, or secondary strategy engine required to generate the yield.


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