Sweep makes collateralized margin loans against on-chain securities, and for DeFi strategies. It can also make off-chain loans with the right structure.
Sweep is designed to meet the demand for safe and redeemable dollar savings. Sweep can fund assets that
Can give money back within one week
Have a low risk of loss, in the range of an AA rating. Liquid investments can be converted to low risk loans when borrowers provide enough capital to cover the value at risk. Money market securities meet this requirement with small amounts of capital.
Allocations are controlled by:
The lending limits placed on each stabilizer by protocol governance
Repayment requests, which have the effect of reducing these lending limits to accommodate a demand from savers to sell SWEEP.
The appetite of borrowers. This is affected by the current interest rate, and the borrower perception of the yield on their mandated investment. The protocol acts to find a rate that savers will buy, and borrowers will accept. If savers are demanding a higher rate than borrowers can earn, borrowers can redeem their investments and shrink the supply of SWEEP.
Money market securities have high capacity, liquidity, and reliability
Sweep has a mission to make margin loans against tokenized securities, including the new generation of tokenized treasuries. Sweep can configure Stabilizers to hold private, permissioned security tokens.
DeFi strategies can stabilize SWEEP price with rapid purchases and sales.
DeFi may pay higher risk adjusted interest rates, especially for small allocations
Sweep DeFi strategies will be delta neutral and protected by appropriate amounts of borrower capital. A Stabilizer will buy and hold the assets of the DeFi strategy. Sweep will only approve allocations that can be liquidated with low slippage in less than five days. The allocation decisions will be controlled and monitored by human borrowers with capital at risk.