Reference transaction
The below represents a trade that Pipeline’s architecture has been stress-tested against. This reference transaction illustrates the type of deal the protocol is designed to finance.
Deal summary
| Parameter | Detail |
|---|---|
| Commodity | Jet fuel — aviation kerosene, JET A-1 |
| Trade corridor | South Korea (sourcing) → Chinese bonded storage (tank farm) → Mongolia (end buyer) |
| Originator / Servicer | Open Mineral AG |
| Sourcing counterparty | Vitol / Korean refiners (FOB South Korea) |
| Storage | Chinese bonded tank farm under CMA (SGS or Intertek) |
| Offtaker | An aviation fuel distributor |
| Facility size | $20M (indicative) |
| Senior tranche | $17M (85%) — funded by Pipeline lenders |
| Equity tranche | $3M (15%) — funded by Open Mineral, first-loss |
| Duration | 90 days |
| Senior coupon | 14.0% gross annualised |
| Collateral structure | CMA over stored product + assignment of offtake receivable |
| Price reference | MOPS (Mean of Platts Singapore) jet fuel benchmark |
| Payment mechanism | LC at sight or documentary collection |
| Hedging | Back-to-back sale with confirmed offtaker at market-linked price |
Lifecycle flow
Step-by-step
Sourcing
Open Mineral identifies the deal — an aviation fuel distributor needs JET A-1, sourced from Korean refiners via Vitol’s supply chain.
KYC and pre-screening
Open Mineral submits KYC packs for borrower, offtaker, and CMA provider. Protocol Operations runs sanctions, AML, and credit screens.
Term sheet and underwriting
Open Mineral prepares the indicative term sheet — facility size, duration, pricing, collateral, hedging. Underwriting goes deep on price assumptions, corridor risk, and offtaker payment record.
Risk committee approval
Committee reviews against the Credit Policy: commodity, corridor, borrower tier, concentration, LTV ladder, hedging adequacy. On approval, the loan gets recorded to the LoanRegistry smart contract.
Equity tranche commitment
Open Mineral funds the $3M equity tranche before senior tranche draws. First-loss capital sits in escrow.
Senior tranche funding
$17M drawn from the Capital Wallet under 3-of-5 cosigner quorum, routed via the Payment Agent to the Originator’s control account, funding the seller.
Cargo loading and sailing
Cargo loads at Korean refinery FOB. Vessel tracking via CTRM. Independent inspectors verify quantity and quality at load port.
Bonded storage
Cargo arrives at the Chinese bonded tank farm. CMA (SGS or Intertek) takes possession, issues warehouse receipts pledged to the Collateral Trust.
Daily monitoring
Cargo value marked against MOPS. LTV calculated against outstanding senior + equity. Margin breach triggers Originator top-up.
Offtake to Mongolia
The jet fuel distributor takes delivery. Payment falls due per LC or documentary collection terms.
Repayment
The jet fuel distributor wires USD to the Trustee’s correspondent account. Trustee instructs USD → USDC on-ramping via Circle Mint. USDC settles into the Capital Wallet.
Yield mint
Trustee and Relayer co-sign a YieldAttestation for the senior coupon net of fees. YieldMinter verifies both signatures and mints into the sPLUSD vault. Share price moves up.
Collateral release and equity distribution
LoanRegistry burns collateral tokens. Collateral Trust releases security. Equity tranche principal plus residual swept to Open Mineral. Loan archived.
Illustrative investor yield
Applying Pipeline’s fee structure to this transaction:
| Component | Value |
|---|---|
| Senior debt deployed (85% of $20M) | $17,000,000 |
| Gross senior interest rate (annualised) | 14.0% |
| Duration | 90 days |
| Gross interest earned | $586,850 ($17M × 14% × 90/365) |
| Less: Management fee (1.0% p.a. on $17M × 90d) | ($41,920) |
| Net interest before performance fee | $544,930 |
| Less: Performance fee (15% of net interest) | ($81,740) |
| Net interest to sPLUSD holders from this deal | $463,190 |
| Effective net yield (annualised, on deployed capital) | ~11.0% p.a. |
Uninvested capital earns base yield from US Treasury bill positions held as USYC. At a 4.5% T-bill rate and a 30% protocol share on Engine B, lenders receive ~3.2% annualised on unallocated capital. With a $100M pool, $85M deployed across concurrent 90-day facilities and $15M in T-bills, blended return is ~9.0–10.0% net of all fees — consistent with Pipeline’s 8–12% target.
90-day duration means deployed capital recycles four times per year.