►
Description
Agenda
Intro by @JuanJuan
Presentation by Joseph McNeila (@Monachil)
MC-DROP Token - Monachil Capital Partners - https://www.monachilpartners.com
MIP6: [MC-DROP] MIP6 Application: Monachil Capital Partners LP DROP: Senior Secured Credit Facility For A Private Credit Fund 1
“Monachil targets sourcing and origination partners that utilize unique and proprietary technology to reach underserved segments of the market, improve risk underwriting, and streamline loan origination.”
Agenda and Discussion:
https://forum.makerdao.com/t/collateral-onboarding-call-33-monachil-friday-june-25-3pm-utc/8896
Governance Forum:
https://forum.makerdao.com/
Disclaimer: These calls and the summaries are produced and hosted by MakerDAO community members. Content produced by the community are not the statements or views of the Maker Foundation.
A
I
welcome
everyone
to
the
collateral,
onboarding
call
number
33..
My
name
is
juan
I'm
the
facilitator
from
ses,
which
is
a
sustainable
ecosystem,
scaling
core
unit,
and
today
I'm
with
the
people
of
monaco
and
I'm
hoping
that
I'm
pronouncing
that
properly
so
joseph
good.
So
joseph
and
his
team
are
going
to
tell
us
a
little
bit
more
about
the
project
and
answer
any
questions
that
we
might
have
so
joe.
If
you
want
to
introduce
yourself
and
tell
us
what
what
this
is
about.
B
So
background
is
ali
melli,
who
is
here
with
us,
as
you
can
see,
founded
monaco
capital
in
2019.
The
fund
was
was
launched,
august
of
of
2020
august
10th
of
2020.
ali,
and
I
spent
the
better
part
of
17
years
working
together
at
at
goldman
sachs
and
so
very
happy
to
be.
Have
the
opportunity
to
to
join
him
here
during
our
time
at
goldman
sachs.
B
We'll
spend
a
lot
of
time
going
over
that,
but
just
as
a
little
bit
of
background,
because
it
does
speak
to
what
it
is
we're
doing
now
at
monaco.
But
during
our
time,
amongst
the
various
things
we
did
in
in
structured
credit
space,
one
of
the
significant
opportunities
that
we
found
was
in
our
structured
lending
business,
and
that
was
a
business
that
that
we
grew.
I
ran
the
business
in
london
for
a
number
of
years.
B
Ali
had
has
run
it
in
different
locations
and
ran
it
globally
before
he
left
as
a
partner
in
in
2019
what
we
learned
and-
and
so
it's
that
experience
in
our
structured
lending
space
that
ali
has
transported
here.
What
we
did
when
we
were
goldman,
you
know
sort
of
vary
depending
on
what
the
market
was,
meaning
the
underlying
assets
varied.
B
What
was
consistent
is
we
typically
lent
against
relatively
illiquid
assets,
with
our
approach
being
that
you
know
it
with
the
right
risk
management
framework,
we
could
value
the
assets
and
and
and
and
ensure
that
you
know
we
were
executing
and
the
right
lending
transactions
and
and
we're
protecting
our
downside
risk,
though
the
acid
class
has
now
migrated
now
that
we
have
moved
to
monochill
the
the
I.
The
idea
is
exactly
the
same.
The
way.
B
What
they
don't
have
is
access
to
sort
of
traditional
banks
to
to
fund
themselves,
which
is
where
we
step
in
our
perspective
on
this
is,
and
our
angle,
compared
to
others
who
are
in
the
space-
and
there
are
others
who
are
in
this
space-
is
that
we
approach
this
with
the
same
risk
management
hatch
that
we
always
wore
when
we
were
at
goldman,
which
is
by
having
you
know,
the
the
understanding,
the
the
platform,
understanding
the
let
the
borrowers
to
that
platform
and
having
the
right
data
we
can.
So
we
can.
B
We
can
quickly
react
to
the
extent
that
you
know
we
see
any
issues
with
with
our
lending
profile.
So
what
we
have
done
is
we
have
we
developed
a
proprietary
technology
which
allows
us
to
int
which
allows
us
to
interface
directly
with
any
of
our
borrowers
and
by
doing
that,
it
lets
us.
Do
a
couple
of
things
number
one
is
is
for
the
due
diligence
process.
We
can
consume
real
data
from
their
underlying
borrowers
to
so
that
we
can
verify
it
ourselves
and
then
once
and
then
for
the
this.
B
Basically,
the
small
handful
five
to
ten
percent
that
make
it
past
our
due
diligence
and
we
actually
transact
with
it-
allows
us
to
consume
that
data
on
a
real-time
basis
as
we
are
as
as
a
means
for
surveillance
of
the
transaction.
What
that
does
for
us
is
two
a
few
things,
two
of
them
I'll
I'll
touch.
B
Upon
importantly,
it
allows
us
to
create
reporting
to
see
how
each
of
the
platforms
are
doing
with
you
know,
vis-a-vis
the
covenants
that
we
have
agreed
in
the
contract
that
we
will
have
entered
with
them
and
by
having
you
know,
by
having
visibility,
not
only
on
whether
or
not
covenant
has
been
breached,
but
whether
or
not
performance
versus
a
covenant
has
is
beginning
to
deteriorate.
It
allows
us
to
act
very
quickly
with
our
clients.
You
know
to
either
grab
more
security
to
make
sure
that
we're
protecting
our
downside
risk.
B
In
that
case,
and-
and
you
know
at
the
limit
which,
because
we
have
the
right-
we
don't
expect
to
need
to
do
to
foreclose
if,
if
we
needed
to
simply
take
the
assets
and
and
you
know,
manage
them
or
liquidate
them
or
ourselves,
all
those
transactions
are
are
are
executed
with.
You
know
a
haircut,
so
you
know
our
advance
rate.
Is
you
know,
somewhere
between
sort
of
60
and
80,
depending
on
what
the
what
what
what
the
transaction
is
and
and
and
and
each
of
them
sort
of
fits
that
profile?
B
We
should
probably
save
that
for
another
time
or
at
the
end,
but
that's
kind
of
the
background
on
on
monitor,
and
so
where
we
are
now
is,
is
you
know
we?
As
mentioned?
We
have
well
not
mentioned
sorry,
as
is
in
the
presentation
we
have.
You
know
17
million
dollars
in
in
commitments
we
have
11
million
dollars,
which
we
have
put
to
work,
we're
very
much
in
in
fundraising
mode.
B
At
the
moment
our
performance
has
been
has
been
relatively
good,
so
we
feel
optimistic
right
now
about
our
ability
to
to
to
raise
capital
which
brings
us
to
you
know,
sort
of
this
proposition
which
which
which
we're
discussing
which
you
know
we
think
will
you
know
not
only
enhance
our,
you
know,
sort
of
abilities
and
our
returns,
but
it
will.
It
is
something
that
you
know
sort
of
knowing
your
objectives
as
well,
be
something
that
we
can.
You
know
we'll
will
grow
with
as
as
the
fun
grow.
D
Thank
you
joe,
so
really
what
we
are
aiming
for
in
our
mipsticks
is
a
credit
facility
backed
by
assets
of
the
fund.
The
structure
that
we
have
put
forward
is
a
what
I
call
low
ltv
loan
at
initially
it's
at
40
percent,
or
if
you
look
at
over
collateralization
250
percent
over
collateralization,
I
that's
the
value
of
assets
of
the
fund
versus
the
amount
of
draw
that
we
are
getting
from
maker.
So
the
idea
is
that
effectively,
if
you
have
20
million
dollar
worth
of
assets,
you
get
8
million
dies
against
those
assets.
D
The
valuation
of
assets
themselves.
Assets
are
themselves,
are
custodied
by
a
third
party
which
is
ssnc.
They
are
our
fund
administrator.
Their
function
is
really
to
make
sure
that
assets
that
we
save
you
are
holding
are
actually
owned
by
the
fund
and
the
payments
are
processed
accordingly.
They
essentially
do
all
of
those
operational
steps
to
make
sure
that
you
know
the
fund
is
performing
as
expected
and
they
are
the
biggest
fund
administrator
in
the
world
or
one
of
the
biggest
fund
administrators
in
the
world,
given
their
technology
platform.
D
In
order
to
achieve
the
transaction
with
maker,
our
proposition
is
to
partner
with
centrifuge,
create
tokens
that
represent
the
effectively
the
loans
to
the
fund
entity
and
then
have
a
lender
spv
which,
on
one
hand,
is
going
to
hold
those
tokens
and
then,
on.
The
other
side,
is
going
to
borrow
versus
those
tokens
from
the
maker.
I'd
like
to
pause
here
and
see
if
there
are
any
questions
or
if
there
are
anything
that
maybe
jason
or
the
team
likes
to.
E
D
So
the
evaluation
is
performed
by
ssn
city
pro,
they
provide
essential
evaluation
statement
and
then,
on
top
of
that,
we
go
through
an
audit
process.
So
we
have
hired
ernst
and
young
to
do
our
annual
audit,
but
the
valuation
of
the
assets
on
a
more
regular
basis.
What
I
call
unaudited
numbers,
the
source
of
that
is
ssnc
as
the
fund
administrator,
and
that
has
some
value
because
independent
from
us
they
verify
the
cash.
D
Anything
that
needs
to
be
happening
on
the
bank
funds
of
the
fund
goes
through
the
fund
administrator
or
residency,
and
that
gives
two
levels
of
protection.
One
of
them
is
making
four
assets
of
the
fund
go
where
they
are
supposed
to
the
other.
One
is
because
they
see
any
cash
movement.
They
can
make
sure
that
the
valuation
matches
you
know
the
cash
movements
in
and
out
of
bank
accounts.
D
We
I
think
it
is
a
revolving
basis
for
two
reasons:
one
of
them
is
as
assets
of
the
fund
grow
or
essentially
is
function
of
availability
of
assets
of
the
funds.
So
for
that
reason
it's
on
revolving
basis
and
it
works
on
both
phase
as
well.
If
valuation
comes
down,
I
if,
for
some
reason
as
a
sensible
zen
says
next
month,
the
value
of
your
assets
is
less
than
you
know,
but
it
was
previous
month
it
will
then
we
have
an
obligation
to
repay
so
it
it
for
so.
B
Let
me
just
make
one
more
point
to
that
ali,
so
the
way
that
it's
our
preference
and
and
to
execute
these
transactions
such
that
we
provide
each
of
these
platforms
with
a
revolving
with
with
revolving
financing.
The
reason
we
do.
That
is
because,
at
the
point
in
time
that
we're
doing
it
we're
if
we
have
gotten
to
execution,
it
means
we're
locking
in
a
level
which
we
think
is
attractive
for
us
and
and
attractive
for
them,
and
so
therefore
locking
that,
in
for
a
longer
term
basis,
is,
is
interesting.
B
For
that
reason,
it's
also
interesting
to
us,
because
in
each
of
the
cases,
though,
this
varies
by
how
much
between
transactions,
the
underlying
transactions
that,
where
that
we're
that
are,
that
are
collateralizing.
Our
line
of
credit
to
the
to
the
platform
tend
to
be
shorter,
dated
so
those
assets,
the
underlying
assets
they
come
due
and
then
they're
sort
of
loaned
out
again.
What
that
does
is
it
gives
us
a
lot
of
visibility,
of
the
performance
of
the
platform
and
and
and
their
borrowers,
which
then
allows
us.
B
You
know
to
choose
our
behavior
as
we're
doing
business
with
them,
which,
if
they're
not
performing
well,
we
can,
you
know,
begin
enforcing
some
of
our
covenants
and
and
sort
of
grabbing
more
security
to
the
extent
they
are
performing.
Well,
we
may
choose
to
upsize
with
them
and
in
each
of
the
transactions
we've
done.
We
have
the
ability
to
upsize.
E
D
B
D
D
B
B
D
Yeah
and
now
in
terms
of
what
frequency
of
the
data
that
we
collect
is
daily
like
on
one
hand,
we
could
put
money
to
work
for
four
and
five
years,
but,
for
example,
we
have
one
of
the
transactions
that
we
have
in
our
portfolio
is
a
pool
of
auto
loans.
The
auto
loans
themselves
are,
you
know.
On
average,
they
have
three
three
years
life
left
in
in
their
life.
However,
we
get
cash
flow
reports
on
a
daily
basis
of
what
portion
of
people
have
paid
on
time.
What
portion
of
people
are
falling
behind?
D
What's
the
speed
of
collections
and
that
information
that
you
get
on
a
daily
basis
informs
you
a
lot,
it
was
actually
very
helpful
for
us
during.
You
know
the
pandemic
to
have
that
information,
because
we
were
seeing
that
the
performance
is
actually
holding
up
fairly
well
and
we
actually
kept
up
sizing
that
and
it
now
matches
the
data
because
now
essentially,
prices
for
used
vehicles
are
higher,
even
though
that
wasn't
an
insight
that
we
had
in
time
that
we
were
making
those
decisions.
D
B
B
You
know
we,
which
I
think
is
an
important
point
right
so
sort
of
18
months
for
auto
loans
and
and
for
some
of
the
other
facilities
that
we've
done.
It
could
be
as
short
as
three
months,
so
we
do
get
to
see.
You
know
quite
a
bit
of
turnover
during
that
the
four
to
five
year
period
that
we've
committed
we've
committed
a
loan
for,
but
sorry.
B
D
I
was
going
to
say
something
along
the
same
lines,
which
is
you
know
when
we
want
to
look
at
assets
that
are
uncorrelated.
You
end
up
with
shorter
dated
stuff
like
on
the
shorter
end
stuff.
We
have
some
loans
that
have
a
maturity
of
one
month.
Essentially
they
are
short-term
loans.
On
the
other
side,
you
know
we,
you
know,
monitoring
them
is
obviously
more
intensive,
so
we
have
a
variety
of
underlying
assets,
but
even
the
credit
that
we
extend
to
the
originators
of
those
assets
tend
to
be
longer
dates.
B
B
A
F
B
D
They
see
the
world
in
terms
of
dollars
not
die,
so
that
lender
spv
essentially
is
doing
that
transformation
of
die
to
dollars
for
them
in
terms
of
the
tenor
of
the
loan
that
is
being
extended
from
that
it
has
a
final
maturity
of
five
years
and
then
in
terms
of
frequency
for
interest
payments.
It's
it's
a
monthly
pay
instrument,
because
again
we
think
it's
important
for
facilities
of
this
nature
to
have
frequent
payment
terms,
and
it
also,
obviously,
you
see
during
that
time.
D
It's
not
a
one-and-done
thing,
it's
not
just
that.
It
needs
to
be
40
percent
ltv
during
the
life
40
percent.
Ltv
needs
to
be
maintained,
provided
that,
if,
if
it
is
not
for
some
reason
maintained,
then
the
cash
flows
from
the
assets
will
be
used
to
deliver
the
loan
so
that
you
know
it
comes
back
to
compliance.
F
C
D
D
One
and
master
funds2
is
going
to
be
have
a
corresponding
non-fungible
token
and
then
the
nft
itself
is
there,
which
represents
the
loans,
are
going
to
be
supported
or
going
to
be
created,
are
going
to
be
used
for
creating
the
tin
and
drop
trenches,
using
essentially
tin
lake
service
agreement
with
centrifuge
and
the
other
thing
that
might
be
relevant
in
the
construct.
If
people
have
questions
is,
why
is
there
master
fund
one
and
master
fund?
Two?
The
answer
is
due
to
different
tax
treatment
for
limited
partners
that
are
investors
in
our
fund.
D
B
C
B
B
No,
that's
actually
that's
very
good
questions.
Thank
you
for
asking
that
and
that's
the
way
that
we
have
have
set.
This
up
is
so
we
actually
don't
have
risk
to
our
counterparty
going
down.
So
what
we
have
risk
is
to
the
assets
which
have
been
which
have
been
pledged
or
sold
to
us
under
the
terms
of
our
transactions,
our
collateral.
B
So
the
way
that
that
is
done
is,
is
you
know
that
collateral
is
is
sold
to
us
on
it?
You
know
we
own
it
on
a
true
sale
basis,
and
so
so,
to
the
extent
that
our
trend,
our
counterparty,
didn't
perform
or
the
underlying
assets
which
the
counterparty
is
using
for
the
performance
of
of
this
begins
to
fail.
We
can
immediately
foreclose
well,
we
can.
We
can
begin
trapping
more
cash
and
ultimately
foreclose
on
the
assets.
B
So
we,
the
the
performance
of
the
underlying
assets,
is
our
risk,
which
is
you
know
back
to
the
kind
of
the
earlier
point
that
I
opened
this
up
with,
which
is
the
way
that
we
have
set
this
fund
up,
which
we
think
gives
us
a
relative
edge
in
the
space.
Is
our
platform,
our
data
system
interfaces
directly
with
each
of
our
borrowers?
You
know
platforms,
so
we
consume
real-time
data
from
their
underlying
borrower
from
the
underlying
bars
we
have.
We
have,
you
know,
sort
of
real-time
visibility
on
the
performance
of
the
underlying
portfolio.
B
C
D
E
D
Sure
so,
on
our
side,
it
is
mainly
that
it's
really
interest
of
our
lps,
so
to
the
extent
that
we
have
lps
or
investors
in
our
funds
that
are
not
u.s
taxpayers,
they
do
not
want
to
have
to
deal
with
hassle
of
filing
taxes
with
irs.
On
the
other
side,
they
have
an
obligation
to
pay
their
taxes
in
the
u.s.
D
So
the
way
we
solve
that
is
by
setting
up
a
corporation
in
u.s,
where
that
corporation
act
as
a
blocker,
which
means
that
they
do
make
the
tax
filing
they
pay
taxes
to
irs,
and
then
the
offshore
investors
receive
a
dividend
from
that
corporation.
That's
essentially
the
proper
form
for
offshore
investors
like
that,
want
to
pay
their
taxes
in
u.s,
but
they
don't
want
to
have
their
own
content
to
their
tax
filing
for
them,
that's
how
they
achieve
their.
They
achieved
that
goal.
So
for
you,
for
example,
look
at
our
structure
for
an
offshore
investors.
D
There
is
a
payment
fund
that
puts
that
money
into
u.s.
Corporation
u.s
corporation
pays
taxes
in
the
u.s
and
then
that
u.s
corporation
gives
that
money
to
our
master
fund
and
makes
the
investment.
The
purpose
of
that
is
to
achieve
compliance
with
u.s
tax,
essentially
laws
and,
at
the
same
time,
not
to
create
operational
burden
for
someone
who
might
be
an
investor
sitting
in
united
kingdom
or
european
union
who
wants
to
be
an
investor
in
the
fund
and
then
for
u.s
investors.
Their
structure
is
somewhat
similar.
D
They
don't
need
to
worry
about
having
a
corporation
that
pays
taxes,
because
they
anybody
have
to
pay
taxes
in
the
us,
so
they
they
need
to
report.
Their
income
is
going
to
be
a
slightly
different,
enhance,
depending
on
these
two
different
class
of
limited
partners
in
the
fund.
We
had
different
entities,
and
you
know
we
also
keep
track
of
our
investments
for
that
matter.
Some
investments
that
we
make
they
are
just
like
investing
in
a
bond
or
full
of
laws.
D
There
is
really
not
that
much
of
a
tax
liability
associated
with
those
investments,
because,
if
you're
a
bond
holder,
even
if
you
are
an
eu
person
holding
essentially
bonds
of
a
u.s
company,
you
don't
have
to
really
worry
about
paying
taxes.
There
is
a
particular
exemption
from
having
to
pay
taxes
called
portfolio
exemption
on
the
other
side
if
the
nature
of
investment
is
active
which,
for
most
of
our
investment,
it's
active
reason
it
is
active
is
because
we
are
going
to
be
structuring
the
transaction.
D
We
are
viewed
as
having
an
active
role
and
by
that
construct
we
need
to
make
sure
that
people
who
invest
money
in
our
fund
as
limited
partners
are
not
viewed
as
actively
engaging
trade
or
business.
The
way
we
achieve
that
is
by
putting
those
investments
in
a
separate
entity
which,
in
our
case,
is
master
fund,
2
and
then
master
fund
2,
any
income
that
is
generated
from
master
fund.
C
B
B
No,
I
I
so
we
we
we
sent
some
slides,
which
would
you
know
mostly
as
a
takeaway,
because
I
know
that
that
this
will
sort
of
the
the
slides
will
remain
available.
So
they
basically
say
the
same
things
we
went
through.
It
gives
background
investment
strategy
for
monitor,
which
I
went
through,
and
then
it
talks
in
more
detail
about
the
sort
of
the
application
which
ali
just
just
went
through.
A
D
Our
proposal
is
to
start
with
an
8
million
die
line
and
then,
as
the
fund
grows,
we
expect
the
faster
growing.
We
will
probably
come
back
with
asking
for
upsizing,
but
in
terms
of
the
scalability
we
think
it
definitely
is
something
that
can
be
scaled
up
to
tens
of
millions
of
dye.
If
not
more
than
that,
and
again,
our
philosophy
is
to
start
with
something
that
is
sizeable,
but
maybe
on
the
smaller
end
of
the
spectrum,
making
sure
we
build
all
of
those
connectivity.
The
technology
works.
C
D
How
can
you
take
us?
I
think
again,
with
the
whole
thing
that
forward-looking
statements
are,
you
know
by
their
nature,
but
we
think
that
essentially,
like
we
already
have
a
big
pipeline,
we
think
over
12
months.
It
will
be
possible
to
deploy
that,
if
not
even
sooner,
to
get
to
that
scale.
But
you
know
it's
a
little
bit
of
it's
going
to
be
a
function
of
our
fundraising,
because
we
also
need
to
make
sure
that
we
have
lp.
We
have
a
very
good
pipeline.
D
B
I
mean
just
to
put
a
finer
point
on
that.
You
know
we're
at
a
number
approaching.
You
know
20
million
dollars
of
of
committed
capital,
and
you
know
our
goal
is
within
the
next
12
months
to
for
that
to
reach
100
million
dollars
in
in
committed
capital
and,
as
ali
said,
we
have
sort
of
the
pipeline
to
put
that
to
work
when
we,
when
we
get
that
in
the
door.
C
B
C
F
D
Theoretically,
it's
possible
that
somebody
in
the
spp
doesn't
do
what
they
are
supposed
to
do.
Then
you
can
sue
the
directors
of
this
tv
because
you
are
supposed
to
act
in
the
best
interest
of
the
vendor
to
the
spv.
So
that's
how
you
can
ensure
that
the
lender
spv
acts
in
the
best
interest
of
makers,
which
I
mean
it's
some
it's
a
structure
that
has
been
tried
and
tested
many
times
in
a
structured
finance
that
that
part
of
it
people
take
trivial.
D
D
D
That
kind
of
puts
a
freeze
in
funds
leaving
and
then
the
court
will
enforce
your
rights
and
again,
the
important
part
is
because
is
is,
is
that
is
existence
of
ssnc
as
an
independent
third
party,
that
their
reputation
and
business
is
very
important
to
themselves,
and
we
don't
expect
them
to
do
anything
unto
art
they
are.
They
need
to
all
represent
interest
of
people
that
are
independent
from
us,
as
the
asset
manager.
B
Know
for
ssnc:
this
is
what
they
do
for
a
living,
this
type
of
flood
administration,
so
they're
used
to
I
mean
it
does
just
happen.
They're
used
to
getting
notice
of
a
potential
event
of
default
and
sort
of
freezing
what
it
is
that
they're
holding
for
the
benefit
of
the
secured,
which
in
this
case,
would
be
the
maker
community.
D
It's
a
very
good
question,
so
are
understand.
That's
a
little
bit
of
maybe
json
question
as
well.
Our
understanding
is
to
make
the
tin
leg
protocol
work.
You
still
need
to
have
a
tin
trench
per
se,
albeit
it's
nominal
in
nature,
and
then,
even
though
the
real
equity
is
the
equity
that
is
not
represented
by
tin,
the
our
real
equity
is
what
is
held
in
the
funds
is
held
by
ssnc.
E
F
Yeah,
maybe
I
could
jump
jump
in
a
little
bit
here.
Okay,
so
we
looked
at
this
deal
and
and
their
funds,
their
funds,
have
traditional
lps,
traditional
investors,
that
are
fiat.
Investors
that
are
investing
in
their
funds
to
have
them
to
have
those
lps
run
through
tin
lake
is
not
really
realistic,
they're
institutional
investors
that
are
not
in
the
crypto
world
at
all.
So
so
we
had
this
this
issue.
F
We
had
this
off
chain
fund
that
is
protected
by
that
does
have
a
fund
administration
that
does
provide
a
monthly
nav
that
does
get
audited
on
an
annual
basis,
but
we
said
how
can
we
get
this
off-chain
equity
and
provide
an
on-chain
warehouse
line
or
senior
senior
line
for
this
for
this
fund,
and
that
was
the
challenge.
The
way
we
and
the
other
part
is
that
for
centrifuge,
the
the
the
drop
is
the
is
the
solution.
F
That's
that
is,
is
the
adapter
that
that
works
with
with
maker,
so
we
felt
the
best
way
to
do
this.
Is
we
create
a
drop
layer
which
is
on
chain
that
goes
into
maker
vault,
but
instead
of
taking
the
traditional
tin
tranch,
which
would
be
on
chain
for
the
junior
tranche,
we'll
just
use
the
fund
off
chain
as
the
junior
tranche?
In
order
to
make
that
work,
we
have
to
do
a
slight
hack.
F
F
Again,
that
would
be
that
would
require
all
of
their
lps
in
their
fund
that
are
traditional
lps
to
convert
to
crypto
and
invest
and
die
and
invest
in
the
funds.
I
hear
you
yeah.
Perhaps
I
could
have
happened
someday,
but
realistically,
if
you're
talking
pension
funds
and
endowments
and
such
it's
not
going
to
happen
today,.
F
Okay,
I
mean
I
I
can
try
and
address
it
again.
Yes,
that's
that's
correct
the
if
we're
talking
a
traditional
institutional
investor
who
does
not
know
crypto
at
all,
they
they
do
not
have
interest
in
purchasing
tin.
Today,
perhaps
in
the
future,
we'll
get
to
the
point
where
institutional
investors
will
look
at
investing
in
a
crypto
on
chain
fund
equally
to
investing
in
the
fiat
fund,
but
for
today,
realistically,
the
the
lps
into
the
monetary
fund
will
be
off
chain:
investors,
fiat
traditional
fiat
investors.
E
D
I
just
wanted
to
maybe
add
one
clarification:
it's
not
directly
related
to
this
question,
but
just
one
comment
that
I
wanted
to
make,
which
is
when
we
talk
about
250
percent
over
collateralization,
that's
vis-a-vis,
the
money
that
we
have
put
out.
So
if
we
ourself
are
lending,
let's
say
at
70
percent
ltv
or
you
know,
140
percent
over
collateralization
suppose
essentially
think
of
the
following
example.
If
we
lend
130
million
100
million
dollars
against
something
that
is
140
million
dollars,
then
the
40
percent
will
be
40
against
100.
D
It
is
not
40
percent
of
140
million,
it
is
40
percent
of
100..
So
we
are
not
really
when
we
say
250
percent
over
collateralization.
We
are
it's
not
over
collateralization
versus
underlying
assets.
It's
a
more
conservative
and
we
think
appropriate
measure
of
over
collateralization,
which
is
over
collateralization
versus
amount
of
money
that
we
have
put
out
or
amount
of
our
assets.
Even
if
our
assets
are
backed
by
assets
that
are
enforced
even
more.
B
F
F
A
F
A
D
Sure
those
prices
will
be
provided
by
ssnc
through
the
monthly
nav.
We
have
an
obligation
to
make
sure
that
those
nav
is
essentially,
calculations
are
available
and
then
they
get
audited
by
er
stand
young
on
an
annual
basis
to
make
sure
that
what
is
provided
as
a
nav
is
essentially
passes.
Accounting
master
as
well.
A
D
So,
and
it
depends
on
what
type
of
events
of
default
are
we
generally
expecting
these
type
of
facilities
to
have
two
things?
One
of
them
is
if
certain
things
are
not
complied.
The
initial
remedy,
for
that
is
cash
trap.
I
all
the
incomes
that
are
generated
by
the
underlying
assets
will
be
diverted
to
pay
the
drop
tranche
and
essentially
we'll
go
to
the
secure
blender.
That's
the
typical
structure
that
we
see
in
the
market
ceos
are
a
great
example
of
that.
Essentially,
you
see
a
bunch
of
defaults
on
the
underlying
loans.
D
You
can
essentially
enforce
the
judge,
get
a
judgment.
Your
rights
are
are
protected
as
a
secured
creditor,
and
there
will
be
a
ucc
filing,
which
is
effectively
equivalent
of
registering
your
collateral
with
the
court
system.
Then
the
trend
before
essentially
the
entering
to
the
transaction,
your
collateral
will
be
registered
with
the
court
system.
So
it's
clear
that
the
collateral
belongs
to
the
senior
creditors.
A
D
Part
of
the
like,
at
the
point
where
we
have
the
credit
agreement
in
place,
I
think
the
the
proper
the
way
these
things
are
done.
These
are
set
up
on
day
one.
You
actually
don't
want
to
wait
till
the
moment.
The
bad
events
happening
to
try
to
register
the
collateral,
the
registration
of
collateral,
which
is
done
through
a
filing
video
cc.
D
We
expect
to
be
done
by
the
console
that
represents
the
lender
spv
and
whichever
console
is
for
them
to
do
that,
that
that
that
work
will
be
done.
Upfront
will
essentially
be
a
conditioned
precedent
to
us
receiving
money
and,
again
that's
market
to
structure.
Market
structure.
I
mean
market
standard
is
before
you
give
someone
money
with
that
aircraft.
Securitization,
be
that
close
securitization.
B
Yeah,
and-
and
so
at
the
point
you
made,
I
think,
is
an
important
one.
Ali
at
all,
this
is
is
pre-wired
on
day
one
right,
and
so
what
that
means
practically,
then,
is
to
the
extent
that
there's
an
event
of
default,
as
you
notify
the
trust
notify
ssnc.
So
the
administrator
that
there
is
potential
event
of
default
and
then
the
rest
of
the
process
just
happens
as
it
was
wired
on
day.
One.
A
A
B
D
Sure
so
there
is
essentially
two
things
that
you
need
to
keep
in
mind.
One
of
them
is
how
people
are
expected
to
react.
The
other
one
is
what
happens
if
people
don't
react,
the
way
they
are
or
they
don't
perform
the
obligations
that
they
are
supposed
to
perform,
and
usually
the
second
component,
which
is
bad
things
that
could
happen
to
people
if
they
don't
perform
the
obligations
that
they
have
is
what
gets
them
to
comply.
So
we
expect,
if
bad
things
happening.
D
Let's
say
the
bad
thing
that
has
happened
is
one
month.
Interest
is
missed,
so
there
is
a
payment
that
is
owned
by
the
borrower's
master
fund
and
master
fund
2.
That
is
supposed
to
come
to
lender
spv.
If
that
payment
is
missed.
The
first
thing
that
lender
spv
will
do
is
to
make
a
claim
and
ask
for
a
judgement
essentially
to
make
the
payment
hack.
D
D
The
board
is
of
that
spv
is
supposed
to
be
the
fiduciary
and
take
those
action
now,
if
the
board
doesn't
do
that
for
some
reason,
suppose
the
board
members
don't
don't
behave,
they
do
the
way
they
are
supposed
to.
Then
they
they
have
personal
liability.
They
can
say
they
can
get
good
as
in
their
individual
capacity,
but.
B
I
I
I
I
think,
but
but
the
real
world
example
I
mean.
I
understand
that,
but
I
mean
that's,
that's
that's
really
an
outlier.
That
would
be
a
far
outlier.
I
think,
if
anything
that
you-
and
I
have
seen-
I
think
you
know
sort
of
the
base
case
is
that
it
becomes
the
board's
responsibility
to
sort
of
you
know
to
file
and
follow
up
right.
D
D
For
some
reason,
then
that's
where
the
ucc
filings
and
registering
the
collateral
becomes
important,
because
at
that
point
in
time,
that
is
what
gives
essentially
the
lender
spv
the
right
to
go
and
say
that.
Okay,
even
though
there
is
a
bankruptcy
proceeding,
I'm
secured
by
these
assets
all
cash
flows,
income-
everything
corresponding
to
these
assets
is
really
my
property
and
then
anyone
any
lp
may
find
anyone
that
other
creditors
of
the
fund.
They
should
really
bait
and
sit
behind
me
and
wait
for
me
me
being
lender
spv
till
I
get
fully
paid.
D
Yeah
very
good
question:
you
will
be
senior
to
the
lps
of
the
fund
because
the
lps
of
the
fund
or
what
we
call
the
off
chain
equity.
Their
ownership
interest-
is
to
the
ownership
in
master
fund,
1
and
master
fund
2..
Now,
if
assets
of
master
fund,
1
and
master
fund
2
are
essentially
pledged
or
registered
as
security
backing
the
loan
that
the
lender
spv
is
making
to
master
fund
one
and
master
fund
two.
It
means
that
essentially
the
first
priority
and
all
the
income
goes
through.
The
lender.
D
And
that's
how
our
contents
and
everyone
also
recognize-
I
mean
suppose
it's
not
even
a
bad
event.
Valuation
of
assets
could
change
some.
I
don't
know
like.
If
assets
are
not
dollar
denominated,
the
va,
the
value
of
the
fixed
rate
would
change.
There
could
be
some
minor
fluctuations,
major
fluctuations,
whatever
happens,
the
first
layer
of
that
piano,
hits
or
change
in
npv
or
changing
nav
is
always
born
by
the
lp.
They
they
are
all
even
on
an
accounting
front.
They
always
take.
D
They
are
paripato,
I
mean
as
much
as
our
structure
is
complex.
It
is
actually
fairly
simple.
Everybody
is
parry
pass
to
all
those
lps,
etc.
They
are
treated
the
same
in
their
structure
is
designed
so
that
everyone
gets
the
same
treatment.
The
only
difference
for
having
these
different
boxes
are
really
like,
making
sure
that
their
tax
filing
doesn't
become
complicated,
but
but
you
know
it's
not
as
if
one
lp
is
more
senior
than
the
other
yeah
and.
B
C
D
C
I
was
just
going
to
ask
it
if,
like
let's
say
like
if
the
fund
experiences
a
significant
percentage
drop
or
like,
is
there
a
notification
that
has
to
take
place
like
let's
say
you
during
your
daily
updates?
You've
noticed
it's
dropped
x
percent
since
the
last
month
update?
Is
there
a
notification
requirement
in
terms
of
letting
a
maker
know
about
that
in
between
monthly
filings?
Sorry,.
B
Yeah,
I
I
I
think
what
so
there'll
be
there'll,
be
you
know,
documentation
between
the
master
funds
and
and
lender
sbb,
and
we
would
expect
those
type
of
requirements
to
be
captured
in
in
that
documentation
and
then
that
would
create
the
obligation
of
the
terms
of
this
transaction.
If
it
were
to
be
there.
F
Let's
say
no
more
than
x
percent
can
be
in
one
acid
originator
or
no
more
than
y
percent
can
be
in
a
certain
geography,
whatever
they
may
be.
You
know
we'll
start
we'll
start
kind
of
forming
those
rules
and
we'll
work
with
will
on
the
real
world
asset
risk
team
to
establish
those,
but
are
those
tracked
by
ssnc.
So
so
will
they
respond
when
they
provide
their
monthly
update?
D
D
A
Any
are
there
any
parting
questions
before
we
close
the
call
where
you
know
we're
on
top
of
the
other,
all
right,
yeah
so
joe
and
ali
and
team.
I
wanted
to
thank
you
for
for
coming
and
giving
us
your
time.
Where
can
people
find
you
and
ask
you
more
questions
if
they
are
seeing
this
later
in
the
recording.