> For the complete documentation index, see [llms.txt](https://csigma-edge.gitbook.io/csigma-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://csigma-edge.gitbook.io/csigma-protocol/about-institutional/architecture-overview.md).

# Architecture Overview

**cSigma** **Institutional** is the **core onchain infrastructure** of the cSigma Protocol, built using the **Diamond Standard (ERC-2535)** for modularity, upgradeability, and scalability. It acts as the unified backend connecting **Edge Pools**, **csUSD Vaults**, and **csLYD Vaults** with **institutional borrowers** and **onchain asset managers**, facilitating the secure deployment and management of capital across real-world and DeFi strategies.

At its core, Institution is composed of multiple **facets** (modules) that handle specific functions such as fund routing, vault accounting, borrower management, payments, and credit evaluation — all operating under a single onchain diamond proxy.

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#### How It Works

1. **Liquidity Aggregation**\
   Funds from Edge Pools (single-asset), csUSD and csLYD Vaults (multi-asset) flow into the **Institution Diamond**, where they are routed via the **Fund Manager** module.
2. **Child Pool Deployment**\
   For every approved borrower or asset manager, the **Institution Factory** creates a dedicated **Child Pool** within the diamond. Each Child Pool represents an isolated credit facility with its own configuration — credit limits, repayment terms, and collateral rules.
3. **AI-Driven Credit Rating**\
   Borrowers and asset managers are continuously monitored by the **AI Credit Engine**, which evaluates financial and onchain performance to assign dynamic credit ratings. 
4. **Fund Deployment & Strategy Execution**

   **Institutional Borrowers** access liquidity from their Child Pools to fund **real-world asset (RWA)** or **onchain yield** strategies**.**
5. **Monitoring, Repayment & Yield Reflection**\
   Borrowers and asset managers repay principal and yield directly into their Child Pools. The Fund Manager aggregates repayments and redistributes them to the originating vaults (Edge, csUSD, csLYD). Vaults automatically update share values, reflecting user yield in real time.