Delegates

Delegates are the credit managers of the protocol. Each pool has one, and the delegate is responsible for the pool's outcomes.

A delegate sources borrowers, underwrites them through the process in Screening, Diligence, and Underwriting, sets loan and pool terms, and services loans through their life — monitoring collateral, collecting financials, and managing exceptions. The delegate also configures the pool: its capacity, fee schedule, liquidation limits, and the first-loss capital it commits.

First-loss capital is what aligns the delegate with lenders. It is the delegate's own capital, held junior to lender capital. When a loan is impaired, the delegate's first-loss position absorbs losses before lender principal is affected, up to the committed amount. A delegate therefore loses money before its lenders do, which is the mechanism that makes underwriting quality the delegate's own problem rather than an externality. The pool surfaces the delegate's first-loss balance and the per-default liquidation limit so lenders can see the protection they hold.

Delegates are accountable and identifiable. Each pool discloses its delegate, the delegate's strategy, and channels to contact them. The delegates are vetted and admitted by the protocol or an administrator.