Assets are the raw materials, financial primitives transform them, strategies combine those transformations, and products package the result for users.

Assets are the raw materials, financial primitives transform them, strategies combine those transformations, and products package the result for users.

Web3 Academy explains DeFi as one connected programmable financial system: assets and claims move through rules, strategies, controls, and failure paths that readers can inspect at three levels of depth.

Explore guided learning paths

• BBeginnerStart with assets, claims, return payers, and loss bearers.
• PPractitionerWork through parameters, balance sheets, and stress scenarios.
• E/AEngineer or auditorRead state transitions, trust boundaries, and properties.

Interactive relationship traceOpen the full concept map

1. 01

   Assets

   Raw materials

   • Asset
   • Collateral
2. 02

   Financial primitives

   Transformations

   • Lending pool
3. 03

   Strategies

   Combinations

   • Strategy
   • Yield strategy
4. 04

   Products

   Packaging

   • Vault
   • Vault share
   • Net asset value

Read left to right: assets enter financial primitives, strategies combine primitive positions, and products package the resulting claims. Governance and risk connect across every stage rather than forming a safe layer outside the system. The trace below uses the same canonical relationships as the full map.

Trace a relationship flow

Choose a flow to isolate matching relationships. The count is part of each label, and every path remains available without JavaScript.

All relationships12Capital flow1Claim flow3Information flow1Return flow1Control flow5Risk flow1

Canonical relationship paths

Source → relationship → target

1. CollateralDepends onAsset

   The source concept requires the target concept as prior knowledge or infrastructure.

2. Lending poolCreates claim onAsset

   The source concept creates a claim whose obligation or backing sits on the target concept.

3. Lending poolUses as collateralCollateral

   The source concept uses the target concept as collateral.

4. VaultDepends onNet asset value

   The source concept requires the target concept as prior knowledge or infrastructure.

5. VaultDepends onStrategy

   The source concept requires the target concept as prior knowledge or infrastructure.

6. VaultCreates claim onVault share

   The source concept creates a claim whose obligation or backing sits on the target concept.

7. VaultPackagesStrategy

   The source concept packages exposure to the target concept for users.

8. Vault shareDepends onNet asset value

   The source concept requires the target concept as prior knowledge or infrastructure.

9. Vault sharePrices withNet asset value

   The source concept uses the target concept to determine or align a price.

10. Vault shareMay fail throughVault

    The source concept can fail because the target concept fails.

11. Yield strategyDepends onStrategy

    The source concept requires the target concept as prior knowledge or infrastructure.

12. Yield strategyGenerates return fromLending pool

    The source concept receives its economic return from the target concept.

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Three-layer model

From financial raw material to user claim

1. 01Money and assets

   The raw materials of the system: stores of value, settlement units, direct resources, and claims.

2. 02Core financial primitives

   Composable transformations—trading, lending, derivatives, and staking—that change positions and obligations.

3. 03Product packaging

   Vaults, funds, and other user-facing claims built from strategies that combine primitive outcomes.

Six connecting flows

Follow what moves—not only what a protocol is called

• 01Capital flowAssets or economic value move.A depositor sends stablecoins into a vault and lending market.
• 02Claim flowAn entitlement or liability is created or transferred.The vault issues shares and the lending market issues a supplier claim.
• 03Information flowPrices, oracle data, or observations move.Oracle prices and market state update valuation and risk checks.
• 04Return flowYield, fees, or gains return.Borrower-paid interest raises strategy proceeds and vault NAV.
• 05Control flowGovernance or permission changes behavior.Governance and privileged roles change parameters and implementations.
• 06Risk flowLoss or failure can propagate.Oracle, liquidity, solvency, or contract failure can reach shareholders.

Featured laboratories

Change the inputs. Inspect the state transition.

View all simulator labs

1. 01Constant-product AMMReserves, fees, execution price, price impact, and arbitrage.
2. 02Lending and liquidationLTV, health factor, interest, shocks, and collateral seizure.
3. 03Vault share accountingNAV, share minting, fees, ownership, withdrawal, and dilution.

Worked composition

Stablecoin lending vault

One position connects a stablecoin asset, a lending primitive, two layered claims, a yield strategy, governance dependencies, and several paths by which loss or delay can reach the user.

1. 01Stablecoin
2. 02Lending pool
3. 03Yield strategy
4. 04Vault
5. 05Vault share

Stablecoin lending vault mechanism and claim changes

Step	Mechanism	Asset or claim change
01	Deposit and issue	A depositor transfers stablecoins to the vault. The vault issues a proportional share claim; the share is not the underlying stablecoin.
02	Supply and transform	The strategy supplies assets to a lending pool. The vault now holds a supplier claim whose value and liquidity depend on the lending market.
03	Accrue and account	Borrowers pay interest. After losses and fees, strategy proceeds raise vault NAV and therefore the value represented by each eligible share.
04	Redeem and settle	A holder burns vault shares and receives a pro-rata amount of assets, subject to available liquidity and the vault accounting rules.

Return path

Borrowers are the economic payer

1. Borrowers pay interest to the lending market.
2. The supplier claim accrues value to the strategy.
3. Net proceeds raise vault NAV after losses and fees.
4. Vault-share holders realize value through redemption.

Loss path

Claims transmit losses as well as returns

1. Bad debt, stale prices, or unavailable liquidity impair the lending claim.
2. Strategy or accounting faults can misstate or lose vault assets.
3. Governance and upgrade authority can change risk parameters or code.
4. After buffers are exhausted, vault-share holders absorb the shortfall.

Canonical risk dependencies

Where failure can enter the composition

• Lending poolmay fail throughBad debt
• Lending poolmay fail throughLiquidity risk
• Lending poolmay fail throughOracle risk
• Lending poolmay fail throughSolvency risk
• Vaultmay fail throughAccounting risk
• Vaultmay fail throughGovernance risk
• Vaultmay fail throughIntegration risk
• Vaultmay fail throughSmart-contract risk
• Vaultmay fail throughUpgrade risk

Explore the complete accounting and security case study