How are losses in lending markets passed on to vaults?
Haedal Lending Vault can allocate funds across multiple lending markets. If collateral liquidation in an underlying market fails to recover the full loan amount, bad debt may remain. If losses in that market are borne by depositors, the vault may also be affected in proportion to the amount it allocated.
For example, if 20% of the vault’s assets are deployed in one market and that position incurs a 5% loss, the impact on the vault as a whole would be about 1%, all else being equal. This figure does not represent current allocations or actual losses.
$SUI When comparing $HAEDAL vaults in the ecosystem, look beyond yields and check the collateral composition of the underlying markets, liquidation mechanisms, and order of loss absorption. The allocation share in each market is a starting point for assessing how much losses could be passed on to the overall position.
Not investment advice. #HAEDAL #Haedal @HaedalProtocol
Haedal Lending Vault can allocate funds across multiple lending markets. If collateral liquidation in an underlying market fails to recover the full loan amount, bad debt may remain. If losses in that market are borne by depositors, the vault may also be affected in proportion to the amount it allocated.
For example, if 20% of the vault’s assets are deployed in one market and that position incurs a 5% loss, the impact on the vault as a whole would be about 1%, all else being equal. This figure does not represent current allocations or actual losses.
$SUI When comparing $HAEDAL vaults in the ecosystem, look beyond yields and check the collateral composition of the underlying markets, liquidation mechanisms, and order of loss absorption. The allocation share in each market is a starting point for assessing how much losses could be passed on to the overall position.
Not investment advice. #HAEDAL #Haedal @HaedalProtocol
