A senior tranche gets paid first, with the junior's capital as the buffer under it. The waterfall enforces both but cannot change how losses arrive. A CLO senior survives behind 5-10% subordination because losses come from hundreds of unrelated borrowers a few percent at a time, and concentration tests keep defaults independent. The junior is sized for that pattern. A tranche on one crypto underlying faces a different pattern. Yield shortfalls and small drawdowns come in often and in pieces, the junior absorbs them as designed. The tail is a depeg or hack, one large loss shared by every position at once, and a junior kept thin for attractive levered yield covers only a small part of that. Receivables deals are the interesting case. A pool of thousands of card receivables has independence built in, so the same waterfall protects a senior far better than it does over a single yield source. Vaults need one of two additions for a complete senior claim: sources that fail independently under one waterfall with concentration limits, or an explicit tail hedge priced as an option. The manager in the junior fixes incentives, correlation still needs diversification or a hedge.