Each liquidity pool is structured as a fixed income product to investors, with access to an investment memorandum to understand the offering. Our funding vehicle for Investors to onboard is a well known institutional grade model of a Luxembourg SPV structure that is legally compliant in all aspects. Defactor believe this will provide investors with both the comfort of a recognised legal structure while also providing inbuilt protection from the compartment structure.
Each pool will issue two tranches to investors. Depending on the risk tolerance of the investor, they will opt for either the Junior or Senior token.
The Senior token, will generate a fixed rate of return (APY) paid quarterly or half yearly depending on the asset class. APY will also be determined by the asset class risk profile.
The Junior token will be a subordinated token that will be subject to first losses up to their full value. Junior token rate of return (APY) will be variable and payable quarterly or half yearly depending on the asset class. The APY will be determined by the asset risk profile.
Key elements of our Pool structure are:
Minimum Amount - 5,000 USDC to provide wide market appeal for all classes of investors
Minimum Term - 12 months committed to allow stable funding
Redemption - 90 day redemption notice on annual maturity to support funding stability
APY - DROP Token Fixed APY xx% / TIN Token Variable APY yy%
Interest Payout - Quarterly or Half Yearly pay out for both DROP & TIN Tokens depending on asset class to reward investors for fixed term funding
Cash Drag - No cash drag on Investors only on RWAO’s as reward to investors for fixed term funding
All Pools will be covered by recourse contracts and collateralized by the funded assets.