How it works

Underwriting and terms

An underwriting memo sets one person's share, hurdle, cap multiple and term from their expected income. The arranger creates the series in the factory, which refuses terms outside the guardrails. Terms are fixed at creation. On-chain, the beneficiary is only beneficiaryId, a commitment without personal data.

The raise

Eligible investors commit USDC during the raise and get a position token with shares equal to their commitment. Once the target is reached or the deadline passes, anyone can close the raise. Below the minimum, every position is refunded in full; otherwise the upfront fee goes to the treasury, the rest to the issuer SPV, and the term starts.

Servicing periods

A period is a quarter by default. After each one, the servicer verifies income and posts the payment due: the share of income above the hurdle, trued up yearly. A period with proven income below the hurdle can be recorded as a hardship pause, moving the end of the term one period later, within the series limit of at most eight.

The engine accepts only what fits under the cap and, in consumer mode, the APR ceiling, and never pulls more than it accepts.

Dispute window and claims

Each payment becomes a batch, pending for the dispute window of 7 to 30 days, during which the trustee can reverse it and return the money to the payer. Then anyone can release it: fees go to the treasury, the net to holders pro rata. Holders can claim at any time, in any state of the series; an expired KYC does not block a claim, only a freeze does.

How a note ends

1. Term. The term, plus any hardship pauses, runs out. Payments for income earned in it can still be posted during the tail, at most two years; then anyone can close the series.
2. Cap. Total payments reach the cap, the amount raised times the cap multiple, or in consumer mode the APR ceiling.
3. Buyout. The issuer pays the buyout price. It waits out the dispute window, so the trustee can reverse it.
4. Death or permanent disability. The trustee terminates the note; the obligation ends. Only insurance proceeds, up to the unreturned principal, can still come in.
5. Consumer withdrawal. Within the withdrawal window and before any payment, the issuer returns the principal; holders are repaid at par.

See Servicing and privacy for how income is proven and what stays off the chain.