Underwriting a Token-Backed Lending Mandate

Token-backed lending looks simple from outside. A holder has an asset and wants liquidity without selling. A lender has capital and wants that liquidity secured. Arranging the introduction is not the work. The work is deciding whether the collateral is what it claims to be, and building a structure that holds when the collateral falls rather than when it drifts.

This note describes how the desk thinks about that, at the level of principle. It names no counterparties, no facilities, and no terms. Those are discussed under NDA.

Collateral before counterparty

Every lending conversation starts at the same place: the asset, read on its own terms. A recognizable name proves nothing on its own. A token becomes collateral only when its supply, unlock schedule, and holder concentration are legible — and when the party pledging it actually controls the tokens.

So the first questions are unglamorous. What is circulating supply against the fully diluted figure. Where does the token sit on its vesting curve, and how much is still locked. Who else holds size, and how correlated are they to the borrower. Read honestly, a cap table tells you more about whether a facility survives than any narrative about the project.

When those facts are not knowable, the asset is not underwritable, and the desk stops there rather than pricing around a blind spot.

Liquidity and volatility are the real exposure

Collateral is not worth its screen price. It is worth the price at which it can actually be sold, in the size held, without moving the market against the seller.

That distinction is the whole discipline. A token can look liquid and trade thin. Depth on a single venue, a handful of market makers, concentrated holders who all move together — these are the conditions under which a position that looks safe becomes unsellable exactly when it must be sold. So the desk looks at where the asset trades, how deep the book is across venues, and how the collateral behaves under stress rather than in calm. Volatility is not a number to average; it is the working assumption that the asset will, at some point, move hard and fast, and the structure has to survive that moment.

Custody and control decide whether any of it is real

A pledge you cannot enforce is not security. It is a promise, and promises are not collateral. Custody is the load-bearing part of the structure, so the questions get concrete.

Where do the tokens sit while the facility is live. Who can move them, under what conditions, and who cannot move them alone. The credible answers are specific rails: tokens held in multisig where no single party holds a quorum, a qualified or institutional custodian, or on-chain escrow with release conditions defined in advance. Good structure removes the need for either side to trust the other’s conduct on a bad day; the collateral arrangement carries that weight instead of goodwill.

Liquidation logic is agreed at the start

The most important terms in a token-backed facility describe what happens when the collateral falls, and they are agreed before the facility funds — in writing, while both parties are calm and aligned.

The trigger is defined clearly, so no one argues later about whether a threshold was crossed. The unwind is described in advance: in what order, over what window, through which venues, so a forced sale does not become a fire sale that harms both sides. And there is buffer between the trigger and the point of real loss, because a mechanism that only works if execution is instant does not work at all. Predictability protects everyone. The borrower knows exactly what they signed. The lender knows recovery is mechanical, not a negotiation held under pressure.

Alignment is structural, not verbal

A facility is well made when neither side is incentivized to surprise the other, and that is a matter of structure rather than goodwill. When the trigger, the process, and the custody are clear from the outset, both parties want the same outcome: the collateral holds and the facility is repaid on its terms. The job is to build the arrangement so that staying aligned is the path of least resistance.

What the desk declines

Discipline is mostly what you decline. The desk turns down collateral it cannot see through — opaque supply, hidden concentration, tokens the borrower does not verifiably control. It turns down assets whose only liquidity is a story about future liquidity. It turns down structures that require one party to trust the other’s conduct on the worst day. And it turns down any mandate that only works if nothing goes wrong, because the entire point of underwriting is that eventually something will.

Saying no early is not lost business. It is what makes a yes worth acting on.

---

Mjolnir Capital is an independent, founder-operated desk for digital assets. It arranges OTC blocks, token-backed credit, and secondaries, with no book of its own and never on the other side of a client’s trade. Engagements are handled directly and kept confidential. Counterparties are not named.

Request an introduction → luis@mjolnircapital.co