> ## Documentation Index
> Fetch the complete documentation index at: https://docs.axient.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Capital accounts

> Separate accounting roles for credit, backstop capital, and protocol reserve.

# Capital roles are not interchangeable

The reference design separates the financial roles that fund credit and absorb
losses.

| Account class    | Purpose                                                            |
| ---------------- | ------------------------------------------------------------------ |
| Credit capital   | Supplies senior credit subject to its stated accounting rules.     |
| Backstop capital | Provides junior loss-absorbing capacity for eligible losses.       |
| Protocol reserve | Holds finite protocol capital and is not a provider-share account. |

## Why separation matters

Combining these balances would make priority and loss treatment ambiguous. The
design instead records each class independently, defines its eligibility for a
given loss path, and prevents one class from being represented as another.

Provider capital is not a guarantee against loss. The design describes
accounting priority and risk allocation, not a promise of principal protection
or return.