Methodology
How the loan book is built, priced, and watched.
For users who want the full picture: how we select originators, how we price the spread between borrower rate and depositor APY, how reserves are sized, how default events flow through the system.
Originator selection
- Licensed and regulated in their home jurisdiction
- ≥3 years of audited financials
- Demonstrated buyback performance through at least one credit downturn
- Skin-in-the-game on every loan (typically 10%+)
- Reasonable concentration in geographies and sectors we understand
- Quarterly review with right of immediate suspension on covenant breach
Spread & pricing
For an illustrative deployment with a borrower paying 15% APR and a depositor APY of 8%:
- Borrower pays+15.0%
- Originator skin / servicing−2.0%
- Loan-loss reserve build−2.5%
- Northvault operating margin−2.5%
- Depositor receives+8.0% APY
Concentration limits
- ≤25% of book per originator
- ≤1% of book per single borrower
- ≤35% of book per country
- ≤30% of book per sector
- Hard-stop at 10% of book per credit-rating bucket below B
- Limits are checked at deployment and re-checked weekly
Reserve policy
- Liquidity reserve target: ≥15% of AUM at all times (hot + warm wallets)
- Loan-loss reserve: 2.5% of deployed AUM, refilled monthly from spread
- Stress-test: book must survive a 10% concurrent buyback event without depositor impact
- Daily reconciliation of on-chain balances against ledger; >0.001% drift triggers an internal incident