[Manager/Borrower Proposal] DAO Pool Loan Term - 12-24 Month

Asset Pool managers typically engage with counterparties and originators on a term basis. Such agreements feature transaction terms that may range from 6 months to 5 years or longer. Most transactions have fixed expenses such as legal costs (and opportunity costs) that often make longer transaction terms desirable. Shorter terms such as 6-months may work on some assets, but greatly restrict the available asset universe. Many counterparties are unwilling to participate in short term deals due to the financing risk at maturity.

Suggestion for the DAO pool to accommodate longer term loans: 12-month, 18-month, and 24-month term loans would be a welcome addition and allow for a more diversified set of assets.

The idea has come up a few times. Truefi is working on lines of credit which can be seen here and the consensus has been that will generally serve for longer term borrowing.

Automated lines of credit will be a great feature add but rates will dynamically adjust which won’t work for borrowers that are seeking fixed cost. We’ve received many requests for longer term loans particularly from those that are investing in illiquid assets or want to match term. Also most portfolios that apply to be seeded by the DAO will require at least one year and in many cases much longer. Suggestion to increase to 12 months and hold there for now as we gather continuing feedback from non-crypto portfolio managers and borrowers that seek to deploy funds off-chain.


Thats a good point. One thing to consider is how it impacts lender liquidity. People won’t like waiting a year to withdraw funds, so its going to put more pressure on liquid exiting.

That could be mitigated by setting a cap on what percent of a pool can be in these 12 month loans(rough, simple fix) and by improving secondary markets for lending pool tokens(harder fix).