Decomposability

Overview

Decomposability is the property that a position can be structurally split at the vehicle layer into smaller units. Not all positions are decomposable; when they are, Dark Matter can surface inventory and support fractional supply. Decomposability is distinct from economic decomposition (e.g., waterfall splits).

What decomposable means

A position is decomposable when the governing documents and vehicle structure allow subdivision into smaller units that retain the same economic rights (pro rata). For example, an SPV LLC interest of 10% may be decomposable into ten 1% interests. Each sub-unit is a valid Position Object.

Implications

Decomposability enables inventory: the ability to offer fractional supply from a larger position. It supports secondary markets, rebalancing, and allocation flexibility. Non-decomposable positions must be transferred whole, limiting liquidity and optionality.

Structural decomposition vs economic decomposition

Structural decomposition splits the position into smaller units at the vehicle layer; each unit has pro rata economic rights. Economic decomposition splits cash flows (e.g., waterfall) without changing the underlying unit structure. Dark Matter models both, but decomposability refers specifically to structural decomposition.

Example

An SPV LLC has 100 units. Investor A holds 20 units. The SPV is decomposable. Investor A can transfer 5 units to Investor B, leaving A with 15 and B with 5. Each transfer creates or updates Position Objects. The sum of units across positions equals the total; the Registry maintains consistency.

Related

• Composability Spectrum — How decomposability fits into the broader four-tier composability model
• Inventory — How decomposed positions flow into inventory
• Position Object — The atomic unit of ownership
• Register a Position — Register your first position