> For the complete documentation index, see [llms.txt](https://docs.3jane.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.3jane.xyz/levered-callable-capital-lcc/mechanism.md).

# Mechanism

LCC replaces capital call legal enforcement with margin and an auction. A staker's margin backs a levered standby that 3Jane can call when credit demand appears; funded calls convert into USD3, and missed calls are backstopped by an auction that pays bidders out of the slashed margin to fill them. Each facility is a standalone contract with its own terms.

<figure><img src="/files/Icb01XJ3iyORtltsqOUY" alt="LCC structure map: a staker posts 7.5% margin against a $100 standby, USDC is deployed into USD3 upon a 3Jane capital call and routed to fintech lender facilities; a missed call slashes the margin into a Dutch auction where a backstop bidder fills the call"><figcaption><p>A staker's margin backs a callable standby. Called capital routes through USD3 to fintech lender facilities. Missed calls are backstopped by a Dutch auction on the slashed margin.</p></figcaption></figure>

### Actors

| Actor               | Role                                                             | What they get                                                                           |
| ------------------- | ---------------------------------------------------------------- | --------------------------------------------------------------------------------------- |
| **Staker**          | Stakes margin, funds their own capital calls, unstakes           | ≈ 20.2% APY on posted margin at launch terms, plus the funding bonus on called capital  |
| **3Jane**           | Creates facilities, opens capital calls, manages risk parameters | Funding certainty with \~13x balance sheet capital efficiency, no capital taken upfront |
| **Backstop bidder** | Fills missed calls in the shortfall auction                      | Margin awards plus USD3 yield, a premium for delivering execution certainty             |

### Stakers

A staker posts margin, the facility's stable margin asset, into the facility. The margin is a performance bond, and the facility levers it into a callable **standby**, 13.33x at launch: the amount of USDC 3Jane may call. The uncalled capital never leaves the staker's custody, and the standby earns fees for as long as it is active.

When there is eligible deployment, a new facility execution, an approved upsize, or a bridge to available deposits, 3Jane opens one call per epoch against the pool of active standby, apportioned pro rata. Each called staker delivers their share in USDC within the funding window and receives USD3 with a 35-day cooldown, keeping the exposure they just funded, while a proportional slice of margin releases back to them.

See [Stakers](/levered-callable-capital-lcc/mechanism/stakers.md) for margin, standby sizing, yield, funding mechanics, and unstaking.

### Backstop bidders

If a staker misses their call, their entire margin is slashed into an auction pool and offered to backstop bidders on a rising schedule: the longer the shortfall sits unfilled, the more margin is on offer. A bidder funds the shortfall in USDC, exactly as the staker would have, and takes the USD3, still in cooldown, plus the offered margin. On a filled shortfall, whatever the auction does not award returns to the slashed staker, minus the auction fee, so the cost of a backstopped miss is the auction's clearing discount rather than the whole bond; the unfilled share of a shortfall is forfeited to the treasury. Because the auction only ever clears the defaulted slice of a call, the backstop's required capacity scales with expected defaults, not with the gross call.

See [Backstop Bidders](/levered-callable-capital-lcc/mechanism/backstop-bidders.md) for auction pricing, clearing dynamics, and bidder returns, and [Call Outcomes](/levered-callable-capital-lcc/mechanism/call-outcomes.md) for how a call is apportioned across a cohort and how each obligation resolves.

### The epoch clock

Every facility runs on a fixed epoch. Stakes activate, calls open, funding settles, and any slash and auction resolve on a schedule that is a pure function of time. See [Epoch Clock](/levered-callable-capital-lcc/mechanism/epoch-clock.md) for phases, launch durations, and facility end states.