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<aside> ⚠️ Deprecated: Check out the Gitbooks for more details!


The Issue: DAO debt is extremely underutilized in this space. There are little to no options for DAOs to take on these financing options, and as a result, many simply dilute. Olympus Pro has found a great deal of success in this area by pioneering the concept of PCV and stemming the issues around dilution, but there's still room to develop this out.

(More on this in Why DAO debt?)

What we're doing: We're an overcollateralized lending solution that leverages the DAO's treasury and the DAO's recurring revenues to originate a loan.

We're looking to be Frax-like in our approach to lending.

Initially, we will overcollateralize loans with project tokens and other treasury assets, but as we prove out our model and build credit histories, we will begin to undercollateralize and unlock the capital efficiency benefits here.

(see How does Lending work?)

The spigot is one of our main innovations. When DAOs fail to pay principal, the spigot, which is used to secure interest payments, is garnished to pay off the debt, beginning with the senior tranche.

(more technical look into What the spigot is)

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The Vision ✨:

DAO debt utilizes debt DAO’s infrastructure, whether this is in the deal coordination layer via our market, the infrastructure we build out, or the capital efficiency. We’ll spin out the underwriting portion of the business as it’s own DAO and work on building out integrations to all the different protocols.

How loan pricing works

What are some of the Use Cases being Explored?

Tokenomics: Debt DAO Tokenomics