Overcollateralisation

When the contract receives the cash flow from the Investment Pools, it is divided into the following components:

• Distribution Yield: The distribution yield is a certain percentage of the total cash flow calculated at the protocol level as an “alpha” percentage of the implicit yield in the established RBs. “Alpha is a protocol-level parameter inversely related to the $nRECORD collateralisation rate. The smaller the alpha, the faster the $nRECORD transitions from being collateralised by future receivables in RBs to being collateralised by USDC.

d = f(IRRs) * 𝜶

Where:

• d: distribution yield

• f(IRRs): a specific function of the IRRs of the MBCs that generate the cash flows

• a: over-collateralisation factor

• Underwriter fee: the fee that remunerates the Underwriter who manages the flow.

• Liquidity provider fee: a protocol fee that remunerates the liquidity providers.

• Accrued Value Flow: the liquidity flow that feeds the Value Accrued Fund and, if not redeemed, is reinvested in other Investment Pools.