Forest Road Vault

Forest Road Vault raises $5M in seed capital.

Forest Road Vault has closed its fifth funding round, bringing total raise to $5M.

Another step in building the infrastructure to bring real-world credit on-chain, and a clear signal of the conviction behind that vision.

Forest Road Vault exists because of years spent originating, underwriting, and servicing real-world credit, work that's now moving into an on-chain financial ecosystem, built to be checked, not just trusted.

We're not done raising. Conversations with strategic investors and partners who share this vision for the future of on-chain credit are still ongoing.

To everyone who's backed this from day one, thank you. It shows.

The vault keeps building.
This is still early.

A loan can be fully collateralized when it's issued and still become riskier without the borrower taking out another dollar.

That's why collateral monitoring matters.

At Forest Road Vault, the digital-assets lending facility uses specific loan-to-value (LTV) thresholds to manage this exposure.

Here's how the structure works.

At origination, the facility operates with a 50% LTV threshold.

In simple terms, a $500,000 loan would require $1 million in eligible collateral at that ratio.

Now imagine the collateral's market value falls to $800,000 while the outstanding loan remains $500,000.

The LTV rises to 62.5%.

Nothing changed about the loan balance. The collateral simply became less valuable.

FRV's facility has a 65% margin-call threshold.

When that threshold is reached, the borrower may be required to provide additional collateral or reduce the outstanding debt, according to the facility's terms.

The liquidation threshold sits at 80%.

This creates a structured approach to monitoring collateral deterioration rather than waiting until the collateral is worth less than the outstanding loan.

But these thresholds don't eliminate risk.

Sharp market movements, execution delays, and insufficient market liquidity can still affect the amount recovered during liquidation.

That's an important distinction.

Collateralization provides a mechanism for managing credit exposure. It doesn't guarantee that every loan will be repaid in full.

For FRV depositors, understanding these thresholds helps explain how the protocol approaches risk in its digital-asset lending operations.

The objective is to identify deteriorating collateral coverage early and establish clear intervention points before losses become more severe.

You hold 10,000 USDfr and want to maximize your FRV points. Should you stake it?

Not necessarily.

Forest Road Vault rewards two different forms of participation.

Holding USDfr earns a 3× points multiplier, increasing to 6× over 365 days. But USDfr itself earns no loan yield.

Staking into sUSDfr starts at a 1× points multiplier, increasing to 2× over the same period. In exchange, your position participates in the loan book's net performance.

That performance is variable. Interest accrues as loans earn it, while fees and credit losses can reduce your returns.

So staking isn't automatically the better decision.

If your priority is points, holding USDfr carries a higher multiplier. If your priority is earning from the loan book, sUSDfr provides that exposure, alongside its risks and redemption constraints.

And remember, points are participation accounting, not guaranteed future rewards.

The decision is what you want your capital to earn, and which risks you're willing to accept.

How Do Points Programs Actually Work?

Points are everywhere in DeFi. But what are they actually worth, and who benefits from them?

Featuring @Nuvex_network, @GachaGalaxyHQ, @EdgeAI_xyz, @taifoon_io, @iamjosevans & @jeremytarica.

Fri 6 Nov · 3PM UTC

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How Do Points Programs Actually Work? 🎙️

Points are everywhere in DeFi. But what are they actually worth, and who benefits from them?

Join us for our next X Spaces as we break down how points programs work and what makes them valuable.

Speakers to be announced shortly!

📅 Friday, 6 November
🕒 3PM UTC

Set a reminder ↓