Since completing the onboarding of the the pool’s second Asset Originator (“AO”), we have deployed approximately $1.8 million into new assets. The pool has benefitted from this increasing exposure, both in terms of liquidity and diversification. The capital deployed so far has gone into assets with a shorter average life of under 5 months, improving the liquidity profile of the pool. Furthermore, capital has been deployed across eleven (11) new underlying counterparties so far, enhancing diversification of the pool.
Due to the growing exposure to the new AO, the average financing fee of the pool has changed from 14% to the current 12.6%. At target exposures, we expect this average fee to be closer to 9.5-10%. As a result, the current discount rate of 13.25% being used by the smart contracts does not properly reflect the value of TIN. Therefore, we are updating the discount rate used by the smart contracts to a more appropriate 9%. We have consent from TIN holders to proceed with the adjustment and are working with Centrifuge to implement. This update will not impact the value of DROP.