# 3.1 Separation Model: Physical Layer and Economic Layer

QuantaRail’s architecture is defined by the structural separation of hardware operations and economic participation—a foundational design principle from which all other architectural elements derive.

#### Physical Layer — Operator Domain

Professional node operators—KYB-verified entities posting $QBT collateral:

* Deploy and maintain qSIM nodes in accordance with protocol specifications
* Fulfill a 99.5% uptime SLA, enforced via on-chain heartbeat monitoring
* Post $QBT collateral as slashing insurance against SLA violations and PoSv fraud
* Receive a share of API fee revenue (40%) and loan interest spread
* Bear hardware depreciation and operational risk; do not bear liquidity or token price risk

#### Economic Layer — Investor Domain

Retail and institutional capital providers depositing stablecoins into the Vault:

* Deposit USDC/USDT into the QuantaRail Vault smart contract
* Receive $qYield tokens based on current Vault NAV (Net Asset Value)
* Earn API fee yield after operator allocation and protocol fee deductions
* Bear smart contract risk and yield volatility; no hardware responsibility
* Exit via Vault redemption; withdrawal queues apply for large positions

#### Inter-Layer Interaction Protocol

1. Depositors fund the Vault with stablecoins; the Vault mints $qYield at current NAV
2. The Vault lending contract issues overcollateralized loans (150% LTV) for hardware procurement
3. Operators deploy qSIM nodes and register them in the protocol registry
4. Nodes receive API assignments and deliver QRNG/PQC services
5. API fees collected in $QBT flow through the fee router: 15% burn, 40% operator, 45% Vault
6. The Vault distributes yield via a buyback-and-burn mechanism
7. Higher yields attract deposits, enabling more loans, nodes, and API capacity

#### System Resilience Through Separation

* **Operator default ≠ Vault insolvency:** Loans are 150% overcollateralized; the insurance fund covers residual shortfalls
* **Vault liquidity stress ≠ node downtime:** Issued loans remain active; nodes continue operating regardless of deposit/withdrawal activity
* **Token price decline ≠ service disruption:** API services continue; $QBT gas pricing adjusts to maintain stable USD-denominated costs

*Figure 3.A — Roles and Risk Exposure by Actor*

<table data-header-hidden><thead><tr><th width="142.5555419921875"></th><th width="172.111083984375"></th><th width="208.3333740234375"></th><th width="220.55548095703125"></th></tr></thead><tbody><tr><td>Actor</td><td>Traditional Finance Analog</td><td>QuantaRail Role</td><td>Risk Exposure</td></tr><tr><td>Operator</td><td>Equipment lessee</td><td>Deploys/operates qSIM nodes</td><td>Depreciation, SLA, slashing</td></tr><tr><td>Vault</td><td>SPV / ABS issuer</td><td>Capital pooling, lending, yield distribution</td><td>Smart contract risk, loan defaults</td></tr><tr><td>$qYield Holder</td><td>ABS investor</td><td>Provides capital, earns yield</td><td>Yield volatility, smart contract risk</td></tr><tr><td>$QBT Staker</td><td>Governance token holder</td><td>Network security, parameter governance</td><td>Slashing, token price</td></tr></tbody></table>


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