Deploying a Secured Line of Credit

Much of what follows is pre-configured and/or automated for users of the App. Lines, Escrows and Spigots are deployed from Credit Coop factory contracts and initialized atomically.

A Secured Line of Credit is deployed from the LineFactory together with its supporting modules: an Escrow (asset collateral), a Spigot (cash-flow collateral), and the Credit Position Token contract that will represent lender positions.

Deployment parameters of the Secured Line of Credit

Set at deployment:

• The Borrower address

• The Admin address — the neutral third party that mediates between Borrower and Lenders (see Roles & Permissions)

• Whether recovery functionality is enabled — this determines whether the emergency ABORTED state and admin recovery of funds are ever possible on this facility (see Credit Events)

• The facility fee schedule (origination, servicing, swap) — set and later amendable only by mutual consent of Admin and Borrower

• The minimum collateral ratio for the attached Escrow

Note that repayment deadlines are not a facility-level parameter: each individual Credit Position carries its own deadline, agreed between Borrower and Lender when the position is created.

Cash-Flow / Revenue-Based Security

A Spigot is deployed alongside the Line. To attach a Borrower cash-flow source (a "Revenue Contract" — any smart contract owned by the Borrower that receives payment flows), the parties configure:

• The address of the Borrower Revenue Contract

• The owner split — the percentage of tokens from that contract (0–100%) escrowed for the Line, with the remainder flowing to the Borrower via the Operator role

• The claim function the Spigot calls to pull tokens, and the transfer-ownership function used to return control of the contract to the Borrower when the facility is repaid

• The whitelisted functions the Operator may still call on the Revenue Contract for business-as-usual operations while the Spigot is attached

• The Operator address, through which the Borrower operates its Revenue Contracts and receives its share of revenue

One Spigot can attach to multiple Revenue Contracts, and can also serve third-party beneficiaries in addition to the Line — see The Spigot.

Asset Collateral

If asset collateral is posted, the parties agree:

• The collateral token(s) — each must be enabled on the Escrow by the Admin before it counts toward the Collateral Ratio (once enabled, a token cannot be disabled)

• For Uniswap V3 positions: the token pair and fee tier must be enabled by the Admin

• The minimum collateral ratio to be maintained

Activation

The Line starts in UNINITIALIZED status. Once its modules are verified as correctly configured (Spigot and Escrow ownership, etc.), initialization moves the Line to ACTIVE and Credit Positions can be created.