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# 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.