# High-Level Description

A **utilizer** proposes a new investment opportunity programmed to a ne&#x77;**`Instrument`** contract. A ne&#x77;**`Instrument`** [could be any investable assets](../instrument-examples-and-usage/overview) such as loans, DeFi strategies, structured products, etc. Each **Vault** is connected and exposed to multiple **`Instruments`** , and whether capital can be supplied to each **`Instrument`** from a **Vault** will be determined by an [underwriting module](../prediction-market-and-amm-technical/tradable-tranches).&#x20;

<img src="https://3340105099-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FFXDxq10tgILHm4JAzNTN%2Fuploads%2FPewKaRJm49KnQcoi3GJz%2Ffile.excalidraw.svg?alt=media&#x26;token=2519cb77-2f70-4326-a380-deec7d173791" alt="" class="gitbook-drawing">

The module primarily involves two parties; managers who are skilled at assessing risks and want a _levered_ exposure to the proposed **`Instrument`** , and **Vault** investors(passive LPs) who want _protection_ from exposure to **`Instrument`** .  The summation of these two market forces determines whether the crowd thinks the new **`Instrument`** has a favorable risk-reward profile. If so, an **`Instrument`** is approved and capital can be provided to the new **`Instrument`** from its parent **Vault** or LPs.&#x20;

{% hint style="info" %}
Put differently, participants long or short tokenized junior tranches of the instrument that is being assessed, and the resulting price in this prediction market determines whether the instrument should be supplied or not. The higher this resulting price, the larger the [first loss protection buffer](../prediction-market-and-amm-technical/tradable-tranches) for the Vault.&#x20;
{% endhint %}

The generality of the system stems from a key insight; an investor would have to predict how much returns(in percentage terms) an asset would deliver prior to making the investment. This holds true regardless of the nature of the asset being invested.

<figure><img src="https://3340105099-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FFXDxq10tgILHm4JAzNTN%2Fuploads%2F39KhjNXfdKHn0DckY3g6%2FProtocol%20Structure%20(1).png?alt=media&#x26;token=6114d625-cfb6-4d9c-81cc-65ede10cd981" alt=""><figcaption><p>RAMM Protocol at a high level. Underwriting module acts as a filter for supplying capital to instruments. </p></figcaption></figure>

### Is RAMM a yield aggregator?&#x20;

Under some lens, it can be viewed as a yield aggregator(integration with other protocols) that underwrites and structures risks(of different strategies across DeFi) for the LPs.&#x20;

However, RAMM is capable of _generating_ its own yield source via in-house written instruments only possible with an underwriting module, such as a [lending pool that accepts any kind of collateral or credit conditions](../instrument-examples-and-usage/conditional-lending-pool-clp), or a [custom creditline](../instrument-examples-and-usage/individual-creditline), or [mortgage](../instrument-examples-and-usage/individual-creditline/mortgage-loans) instruments.&#x20;



**Instrument Cycle**&#x20;

All Instruments within the protocol follow the following cycle

1. [Proposal](../protocol-flow/proposal)&#x20;
2. [Assessment](../protocol-flow/assessment-and-decision-aggregation) [& Decision Aggregation](../protocol-flow/assessment-and-decision-aggregation)
3. [Post Approval (if approved) Compute and realize P\&L for participants](../prediction-market-and-amm-technical/post-approval)

The description of each step is outlined in the [**Phases**](../protocol-flow/overview) section



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