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Clear answers about Paravel, vault participation, fees, withdrawals, and the risks of PayFi lending.
A Paravel Vault is a pool of capital that lends into real-world credit — specifically PayFi, meaning short-duration receivables arising from cross-border payment financing and similar payment flows.
You deposit stablecoins or digital assets into the Vault and receive a Vault Interest, which is a token representing your proportionate share of the Vault. The Vault's assets are deployed into loans and other credit exposures. Your return, if there is one, comes from the performance of those loans.
PayFi is short-duration lending against payment flows rather than against collateral. A typical exposure funds the working capital gap a payment business faces when it has to pre-fund a cross-border payment before the corresponding settlement arrives. Durations are usually measured in weeks rather than years.
The economics differ from collateralised crypto lending in an important way: there is generally no liquid collateral to seize if a borrower fails. Recovery depends on the borrower's own solvency and on enforcement in their jurisdiction.
No. Paravel previously operated automated on-chain yield strategies across DeFi protocols. The move into real-world credit is a deliberate change of business, and it changes the risk profile materially — from smart contract and market risk to credit risk, counterparty risk, and the risk of assets held off-chain.