What are the risks?

The Secured Peer-to-Peer Loans program is structured to minimise risk for both Borrowers and Lenders through over-collateralisation and frequent revaluation of pledged metals.

Borrowers retain ownership of their metals, but a lien is placed over the collateral in favour of the Lender. The collateralised metals remain securely stored and continue to benefit from the protections of S.T.A.R. Storage.

Collateral is generally pledged at 200%* of the Loan amount and is re-valued every five minutes based on prevailing spot prices. If Collateral Coverage falls to 110% or below and any required collateral call remains unfulfilled, liquidation will occur in accordance with the Terms.

In periods of significant market volatility, prices may open substantially lower at the start of a trading session. If the market opens below the 110% threshold, a Liquidation Event may occur at that lower price. In such circumstances, there is a risk that liquidation proceeds may be insufficient to fully cover the Loan principal and/or accrued interest.

While the framework is designed to reduce risk through over-collateralisation and frequent revaluation, all market-based lending carries some level of risk. Extreme and rapid price movements, although historically uncommon, may result in liquidation events. The program is therefore low risk, but not risk free.

One-month Loans may be funded at a lower collateral ratio of 160% (approximately 62.5% Loan-to-Value) for silver, platinum, palladium, nickel, and cobalt. Gold, across all tenors, may be borrowed up to 62.5% Loan-to-Value.