> For the complete documentation index, see [llms.txt](https://docs.nara.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.nara.io/nara/quickstart/why-nara.md). # Why Nara? ## Why Nara? **On-chain dollars lack a yield source that is tied to real economic activity, short in duration, and liquid enough to sit inside DeFi. Payment financing has all three properties.** Nara's job is to underwrite it, structure it, and expose it as two composable tokens, with the team's own capital in first loss. #### The gap in on-chain yield Most dollar yield available on-chain comes from one of four places. Each carries a trade-off that Nara is designed to avoid, and Nara carries trade-offs of its own, listed below the table. | Yield source | Where the return comes from | Liquidity | Trade-off | | ----------------------------- | ---------------------------------------------------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | | Tokenized T-bills | Government rates | Instant to T+1 | Capped at the risk-free rate; usually permissioned | | Basis and funding-rate trades | Perpetual futures premiums | Days | Variable, can turn negative, tied to the crypto cycle | | DeFi lending | Crypto-collateralized borrowers | Instant while utilization allows | Rates collapse when leverage leaves the system | | Traditional private credit | SME and consumer loans | Months to years; redemptions gated or absent | Long duration; monthly or quarterly NAV; opaque | | **Payment financing (Nara)** | Premiums paid by payment companies to bridge one-to-five-day settlement gaps | 7-day cooldown; 14-day primary exit; up to about 90 days under stress | Credit, settlement and operational risk on borrowers, managed through underwriting, structure and a first-loss fund | #### Why payment financing suits an on-chain dollar **Short duration.** A payment advance turns in hours to days. Nara's core focus is T+0 to T+5 settlement flows; adjacent positions such as card receivables run 30 to 40 days on average. Short tenor means capital comes back without selling anything, which is what allows a 7-day unstaking cooldown and a 7-day redemption target instead of a multi-month lock. **Embedded repayment.** The financed flow repays itself. When the fiat or settlement leg lands, the borrower repays principal plus interest. Nara's allocation policy favours structures where repayment is pre-funded, or where the credit risk sits with a large payment network or platform rather than with the borrower. **Low correlation.** Demand for settlement liquidity is driven by payment volume, not by crypto leverage or funding rates. Returns can still fall when volumes drop or borrowers under-utilize their lines, but the driver is different from the rest of DeFi. **Granularity.** Nara prefers thousands of small, self-liquidating advances to a handful of large loans. The anchor position at launch, Fasanara mGlobal, diversifies across 130+ originators and 700,000+ open positions on its own. #### What Nara adds * **Underwriting discipline.** 8 weighted pillars, 42 criteria, 7 knock-out gates, a 41-item evidence checklist, and unanimous Investment Committee approval. No score is assigned without evidence. * **Liquidity laddering.** A liquid reserve (policy range 20% to 35% of NAV) plus staggered redemption terms across positions, so no single borrower's settlement engine determines whether redemptions clear. * **A first-loss layer funded by the team.** A $250,000 Insurance Fund from the team's own treasury sits ahead of every holder, and about 1% of assets a year (10% of gross yield at the target rate) tops it up continuously. There is no performance fee; the retention stays in the holders' own buffer. Its balance is on-chain. * **Verifiable state.** Supply, exchange rate, redemption queue, mint cap and every admin action are on-chain and public. Positions and concentrations are on the [dashboard](https://app.nara.io/transparency). #### Target return Nara targets a 9% to 10% gross base yield. About 1% of assets a year (10% of gross yield at the target rate) is retained in the Insurance Fund, which is the holders' own first-loss buffer, not a fee. That is a target, not a guarantee, and it is not the figure you will receive: the realized APR, with its trailing 7, 14 and 30-day averages, is published on the [dashboard](https://app.nara.io/transparency) and is the only figure that reflects what the portfolio has actually paid. See Risks. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. 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