Origination Fee

There may be certain participants who work with Borrowers to establish terms and bring them to the protocol. To compensate them for these efforts, Borrower Pools support an origination fee that is paid to the pool's originator. The origination fee is defined as a percentage of the interest.

For example, for a $10M Borrower Pool with 15% interest paid monthly and a 5% origination fee, the Borrower would pay monthly interest of $125K and the originator would receive a monthly fee of $6.25K. To align incentives with capital providers, the originator fee is treated as the most junior tranche, so every payment first goes toward what is owed to the senior pool and backers before it goes toward the originator fee.