Monitoring framework

Underwriting decides whether to lend; monitoring decides whether to keep lending. Once a facility is live, the delegate tracks it continuously rather than only at maturity.

Monitoring runs on three streams. Borrower health is tracked through the reporting agreed at underwriting — monthly financials as a baseline, though the specific cadence is set per facility — and through the borrower's rating, which is updated as those financials arrive. Collateral coverage, where a loan is secured, is monitored against the required ratio using Chainlink price feeds, so a fall in collateral value is caught continuously as coverage tightens, not discovered only after it breaches. Covenant compliance is checked against the terms in the MLA as borrower reporting comes in, so a breach tied to financial performance is identified on the same cadence as that reporting, while a breach tied to on-chain, price-dependent terms — like a coverage ratio — is caught in near real time regardless of the reporting schedule.

The outputs of monitoring are the pool metrics a lender sees: loans at risk, unrealized loss, average collateralization, and the realized default rate. Those figures are not cosmetic; they are the monitoring framework made visible, and they are the earliest signal a lender has that a pool's condition is changing — with price-dependent metrics like coverage moving as fast as the underlying market does, and borrower-reported metrics moving as fast as the delegate's reporting cadence for that facility allows.