Risk Management & Enhancements

Overcollateralization

If the distinct pool of assets in the SPC contains varying GPU-backed loans at face value of $100,000,000 and the amount of tokenized GPU tokens purchased by Investors is $75,000,000, then $25,000,000 of distinct assets are left to still satisfy the existing $75,000,000 purchased by investors representing a ~33% overcollateralization.

Cash Reserves

Specific amount of capital set aside left to service interest and debt repayment. Continuing the previous example, if the initial $75,000,000 has a side-pocket for $5,000,000 in cash reserves this represents a ~6.6% reserve. The $5,000,000 would be funded by the proceeds of the debt purchase, so $70,000,000 would be sent to the underwriter with the remaining $5,000,000 to an account not accessible by the SP nor the Underwriter.

Credit Insurance

GAIB can set out to get insurance on the debt instrument itself. There are multiple regulated firms that can offer this insurance normally paying a fixed percentage in the event of a default. Thus, transferring risk of nonpayment from the GPU Provider to a well-regarded insurance provider with a large balance sheet.