The Funding Phase

This is the first phase of the life of the Vault after its creation. During this phase, Investors are able to transfer digital assets to the Vault in exchange for a Vault Token. Each Vault contains a total amount of Vault Tokens that is equal to the principal of the loan.

During this phase, the following happens:

• For every unit of digital asset deposited by Investors, they receive one Vault token. Vault Tokens will increase in value as Borrowers will pay interest to the Vault.

• During this phase, the Vault is not locked to Investors.This means that Investors can take out their principal by returning the Vault Tokens they received, in which case no interest is payable.

• The Vault is locked to The Borrower. This means that the Borrower cannot withdraw any funds out until the Lending Phase begins.