Risk Management

The main objective is to mitigate risk throughout the loan cycle, from underwriting to debt recovery

Our Risk Framework allows Zharta to offer not only liquidation protection to its Borrowers but also a fair risk-adjusted return to its Lenders.

Key Risks	Risk Module	Goals / Actions
NFT Valuation	Appraisal Model	Minimizing the appraisal error against real NFT sales
Credit / Underwriting	Protocol Simulator / Stability Controls	Manage Credit Risk through adequate LTV and Maturity, in addition to Debt Limits
Liquidity	Stability Controls	Maintain balanced operational liquidity for Loans and Withdrawals
Fraud / Hack	Other Checks	Avoid loan origination from NFTs flagged as suspicious by key marketplaces like OpenSea
Market (Systemic risk)	Risk Monitoring	Monitor key Crypto/NFT market indicators and, if necessary, reduce underwriting risk
NFT/Collection (Unsystemic risk)	Risk Monitoring	Monitor key risks of Supported Collections and, if necessary, reduce exposure and/or remove NFT Collection
Liquidation	Recovery / Liquidation	Minimize risk of capital loss through rules-based liquidation, balancing speed and execution