Vaults aren't the right structure for fixed-rate markets.
A fixed-rate loan is a specific piece of risk. There's a borrower, collateral, a maturity, a liquidity profile, and a price for taking it on.
In a vault, the depositor picks none of that. You put money into a pool and quietly become the counterparty to whatever loans the vault funds.
And the two sides don't actually match.
The borrower has a fixed rate locked in until maturity. The depositor still thinks they can withdraw whenever they want.
But that duration risk doesn't disappear. It just sits with whoever is still in the vault when everyone wants liquidity at once.
Bad debt is the same story. One position blows up and the loss gets socialized across everyone, including people who would never have touched that collateral if you'd asked them directly.
Fixed-rate lending needs a real counterparty on the other side. Someone who accepted the terms, took the risk on purpose, and is getting paid for it.
A vault isn't that counterparty. It just hides who is actually underwriting the debt.
A fixed-rate loan is a specific piece of risk. There's a borrower, collateral, a maturity, a liquidity profile, and a price for taking it on.
In a vault, the depositor picks none of that. You put money into a pool and quietly become the counterparty to whatever loans the vault funds.
And the two sides don't actually match.
The borrower has a fixed rate locked in until maturity. The depositor still thinks they can withdraw whenever they want.
But that duration risk doesn't disappear. It just sits with whoever is still in the vault when everyone wants liquidity at once.
Bad debt is the same story. One position blows up and the loss gets socialized across everyone, including people who would never have touched that collateral if you'd asked them directly.
Fixed-rate lending needs a real counterparty on the other side. Someone who accepted the terms, took the risk on purpose, and is getting paid for it.
A vault isn't that counterparty. It just hides who is actually underwriting the debt.
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