Yet another first for the industry

May 16, 2022

We continue to make good progress on [ ] and we will soon be able to offer the first ever credit protection product for private credit markets. To start, we're going to be layering it into just our blended notes and not a note for any individual borrower as we want to ensure that in the event of a default, we don't damage their long term prospects for success. We're tracking well towards launching the first blended note with credit protection coverage on June 1st.  There's been a few key developments in recent weeks that are making all of this possible.

First, we had to make sure that by sending over payments to them in exchange for credit protection, we did not become classified as a [ ]. There are onerous rules and regulations that would come into play if we had to register that would put the entire endeavor at risk. Fortunately, our counsel has deemed the transfer of payments from Percent to [ ] as an integral part of the sale of securities that we make available to investors through our agreement with them and as a result, this doesn't constitute [ ].

Second, we had to determine what to call this product they are offering to investors via our blended notes. The realistic path, which is a net positive, is that these will be registered as [ ], a well understood and popular risk management mechanism in credit markets. In doing so and taking this proactive approach, we can ensure that what we're doing is as above board as possible despite crypto operating in a bit of a gray area. This also expedites the process of us coming to market as the legal agreements to establish a [ ] between two groups (e.g. Percent and [ ]) is already well understood given the precedent set by public debt markets.

[ ] for private credit is an absolute game changer and it's yet another first we're bringing to the industry 🥇