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Different stakeholders interact with a market (see next section for more information on markets):
Investors invest in the liquidity pool or in specific tranches of specific deals on the market. They invest in the currency of that specific market. For example, the FinTech market works with USDC; but we will soon set up markets in different stable coins.
Investors which invest in tranches of specific deals are called underwriters. Our underwriters are represented by a group of institutional investors such as asset managers, credit funds and hedge funds. These accredited investors supply the junior tranche of our credit deals. Meaning they take a higher risk (first-loss capital) but have potentially higher yields because of the senior tranche leverage. They analyze our deals as individual investment opportunities. Their confidence in supplying capital gives trust to our investors in the junior tranche.
Liquidity providers supply capital to the liquidity pool of a market to earn a low-risk but stable and attractive yield. Their capital is allocated to the deals underwritten by the underwriters, representing the senior tranche. They are thus protected by the first-loss capital as provided by the underwriters. By investing in the liquidity pool, liquidity providers automatically get exposure to all the deals in the market.
Borrowers get credit facilities from a market. They go through stringent due diligence, underwriting, and structuring process as defined by the asset manager.
In the FinTech market, we work with FinTechs (non-bank financial institutions) in emerging countries. They use the credit facility to distribute capital to their end-borrowers. The borrowers draw down stablecoins from the market and convert this into their local currency (fiat).
Next to the FinTech market, other markets coexist. Our technology is borrower-agnostic, meaning that we can handle any kind of debt; e.g. corporate debt.
Asset managers control which investors and borrowers can interact with their market and create deals for their borrowers. They control the governance of the market.