Secured Line of Credit

The first instance of debt-based financing issued natively onchain

The Secured Line of Credit is a credit facility secured by onchain cash flows and/or asset collateral.

Benefits for Borrowers

• Flexible financing for OpEx and longer term growth initiatives with no fixed repayment schedule

• On-demand liquidity. Only use what you need, when you need it

• Leverage future cash flow/revenue (assets you don’t even have yet) to drive growth

• Syndication - the credit line does not have to be solely in USDC from one lender, it supports multiple assets and multiple lenders for each Secured Line of Credit.

Benefits for Lenders

• Assess borrower risk and price accordingly via lender-specific interest rates

• Receive a return on deposited capital even if funds are not drawn down

• Withdraw deposited capital on-demand if funds aren’t drawn down by a Borrower

• A Line of Credit is collateralized by the borrower's cash flows via the Spigot to service debt

• Recourse via priority repayment, programmatically enforced

Not sure what a revolving Line of Credit is? For a basic overview from TradFi, see here.