Weeks ago rsETH broke and DeFi depositors lost hundreds of millions.
@Benjamin918_ explains why that same event, inside @CapApp, doesn't create bad debt.
🚨 The Problem: Although semi-liquid private credit vehicles have redemptions backed by loans with 4–7 year maturities, the math often doesn't work.
To put it simply, you can't offer periodic liquidity on illiquid assets without holding return-diluting cash buffers, or gating
A BTC miner guarantees a manufacturing loan with his own Bitcoin. If the loan goes bad, @CapApp takes the BTC and repays depositors.
stcUSD created a new actor to answer who bears the risk: the underwriter.
Odyssey is increasing their borrowing capacity on Cap by over 3x.
Cap is the credit platform powered by financial guarantees that makes it all possible.
Covered yield that scales. That’s Cap 🤝
Odyssey's borrowing capacity on @CapApp has increased from ~$1.3M to ~$4.8M.
The expanded credit line gives Odyssey access to significantly more capital to deploy across its yield strategies, backed by @VesperFi's delegated collateral.
Risk needs to be assessed 24/7 onchain, and TradFi just can’t do that yet. Investors should be able to get vouched for and have access to their loans immediately. With @defidave, head of growth at @CapApp
Although private credit is reaching new heights, its current structure limits its potential.
In this series, Solving Private Credit, we will explore the problems facing private credit and the solutions that are built into the very core of Cap's platform.
First Up: Opacity 👇
The Problem: Private credit portfolios are priced quarterly by the managers who originated the loans. Lenders cannot determine the health of the portfolio or if there are conflicts of interests.
The Cap Solution: Transparency from Cap. Instead of waiting for quarterly updates,
stcUSD from @CapApp pays stablecoin yield from manufacturing plants, film productions and global trade.
@Benjamin918_ breaks it down end to end: where the yield comes from, who takes the first loss, what happens if the collateral breaks.
