Understanding the PRN Loyalty Program for Lines of Credit (LoC)

At Peoples Reserve, we believe your cost of capital should reflect your commitment to the ecosystem. The PRN Loyalty Program is a dynamic interest-rate optimizer that automatically adjusts your borrowing costs based on your total relationship with the platform. Holding PRN lowers your costs. High-loyalty members enjoy interest rate reductions of up to 4%

Table of Contents

1. How Your Tier is Calculated: Portfolio Power
2. Loyalty Tiers & Base Rates
3. The Overcollateralization (OC) Multiplier (BLOC Only)
4. Strategic Examples: Engineering Your Rate
5. Key Program Rules

How Your Tier is Calculated: Portfolio Power

Most platforms calculate tiers based strictly on the amount of collateral in a specific loan. Peoples Reserve takes a more holistic approach.

The Total Portfolio Metric:
Your Loyalty Tier is determined by the ratio of your PRN Loyalty Tokens to your total Portfolio Balance. This calculation creates a dynamic "Loyalty Ratio" that determines your eligible interest rates for both BLOC and BBLOC.

BBLOC Loyalty Level and Rates

Note: The BBLOC rates are only affected by your loyalty level. Each level lowers your APR capping out at 8% APR at diamond. 

BLOC Loyalty Level & Overcollateralization Rates

BLOC is effected by Loyalty Level and Collateral ratio. The Loyalty Level is only the starting point. You have the power to manually drive your rate even lower by increasing your collateral-to-debt ratio.

Note: This assumes the max overcollaterlization of 200%

The Math of Savings:
For every 50% you overcollateralize your loan beyond the starting Loyalty LTV ratio, your interest rate drops by 1%.

• The Ceiling: You can overcollateralize up to a maximum of 200%.
• The Maximum Discount: Through overcollateralization alone, you can shave up to 4% off your base loyalty rate.

Strategic Examples: Engineering Your Rate

The Peoples Reserve ecosystem is designed to reward both loyalty (holding PRN) and safety (providing extra collateral). By combining these two systems, you can "engineer" your interest rate down from the standard rates to the platform floor.

To visualize how these systems work together, consider these two paths a borrower might take:

Scenario A: The Basic Borrower

This borrower uses the minimum requirements to access liquidity quickly.

• Loyalty Tier: Basic (< 2% PRN Ratio)
• Base BLOC Rate: 13% APR
• Collateral Strategy: Standard 50% LTV (Collateral is exactly 2x the loan).
• Overcollateral Discount: 0% (No extra buffer provided).
• Final Result: 13% APR

Scenario B: The Diamond Borrower

This borrower maximizes both systems to achieve the lowest possible cost of capital on the platform.

• Loyalty Tier: Diamond (10%+ PRN Ratio)
• Base BLOC Rate: 9% APR
• Collateral Strategy: Max out by providing a 200% extra buffer over the loan amount (Collateral is 4x the loan value).
• Discount Calculation: Every 50% of extra buffer = 1% reduction.
  • 200% extra buffer = 4% reduction.
• Final Result: 9% (Base) - 4% (Discount) = 5% APR

Key Program Rules

• Dynamic Adjustments: As the market value of your portfolio fluctuates, your Loyalty Level may adjust. This ensures you are always receiving a rate that reflects your current standing.
• Variable Rate: The system automatically calculates your best possible rate based on your current Loyalty Level and LTV.
• Loyalty vs. Collateral: Remember, your Loyalty level is determined by the ratio of your PRN Loyalty Tokens to your total Portfolio Balance. while your overcollateral discount is based specifically on the collateral tied to that individual loan.

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