Line of Credit Features (v1)

In this section we introduce the main features of a Line of Credit as available in its first version. An enhanced version will be released soon so expect some updates soon.

There are currently two ways to secure the Line of Credit, using borrower cash flows and/or asset collateral deposited by a Borrower.

Revenue-Based Financing

The revenue-based financing approach, facilitated by the Spigot, automatically collateralizes a percentage of the Borrower's revenue to repay the line. It provides security through having Trustless Recourse to the cash flow stream of the Borrower in any event of default.

Asset-Based Lending

This more conventional approach takes tokens deposited by a Borrower and uses their spot price to calculate a collateral ratio. If the collateral ratio falls below the minimum required then the loan becomes eligible for liquidation.