Debt DAO Docs

Revenue-Based Financing

The Spigot secures on-chain cashflows to automatically repay interest and principal of a loan.
It will start to escrow 100% of the value from a Borrower's Revenue Contract f the Borrower hasn’t fully repaid all outstanding debt by the expiry date or is otherwise in default.
This is the first time that trustless revenue-based financing has been available on-chain.
Benefits include:
  • Lender protection is enforceable trustlessly on-chain
  • Lenders have confidence that their loan is backed by verifiable on-chain revenues and have trustless assurances that a borrower will repay a loan
  • The Spigot also benefits Borrowers since they can take out larger loans at lower interest rates
  • Borrowers can gain access to the most flexible, low-rate loans with no upfront collateral
This is how cryptonative trustlessly secured lending works.