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Asset Allocation

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.

Allocation mechanics

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.

Securities assets

Money market securities have high capacity, liquidity, and reliability

On-chain securities

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.

Off-chain margin lending structure

Sweep can make off-chain margin loans with appropriate legal agreements

DeFi assets

Sweep may make allocations to DeFi.
  • 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.
Last modified 5mo ago