> For the complete documentation index, see [llms.txt](https://docs.superhedge.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.superhedge.com/superhedge-products/n-vaults.md).

# N-Vaults

## How does it work?

N-Vaults are capital pools designed to replicate TradFi structured notes, which typically consist of two key components: a [zero-coupon bond](https://www.investopedia.com/terms/z/zero-couponbond.asp) and a structured options strategy. The zero-coupon bond ensures principal-protection at maturity, while the structured options strategy offers the potential for enhanced returns.

{% hint style="info" %}
100% Principal-Protected Structured Note = Zero-Coupon Bond + Options Strategy
{% endhint %}

N-Vault’s zero-coupon bond component is fully on-chain, powered by Pendle Finance’s [Principal Tokens (PT)](https://docs.pendle.finance/ProtocolMechanics/YieldTokenization/PT), while the options strategy is deployed through CEXs, DEXs, or market makers (MM).

<figure><img src="/files/3I8UakQOuY5QhZoMKZAN" alt=""><figcaption><p>N-Vault Flows</p></figcaption></figure>