Funding, FZR and stablecoins
How lending capital, stablecoins and FZR differ.
A loan, its funding currency and a protection arrangement have separate roles. Understanding each one helps explain who receives funds, who owes repayment and who may bear a loss.
What to check
Separate the loan from the assets around it.
Follow the role and contractual rights of each position.
- The loan
The borrower owes repayment. The lender’s rights are set out in the financing agreement.
- The funding currency
Fiat or supported stablecoins move the funds to the borrower and carry repayments back.
- The FZR risk stake
A participant can voluntarily accept defined loss exposure under a separate risk mandate.
- The payout funds
Money must be available to pay an eligible claim after authorised assessment.
What it means
Trace both the exposure and the payout funds.
An FZR risk stake may carry agreed loss exposure. Paying a valid claim still requires available funds and an authorised payout process. The token’s market value alone does not establish that capacity.
Common questions
Can FZR protection replace lending capital?
In the proposed model, lender cash or stablecoins fund the borrower. FZR risk participation is a separate arrangement; it does not itself supply the loan principal.