What the yield section of the calculator can show — and what it cannot.
By the time they sign with us, most borrowers have spent weeks thinking about collateral, LTV, and margin mechanics. Fewer have a plan for where the stablecoin proceeds go next.
That’s the second decision, and the one that determines whether borrowed capital earns more than it costs. A pledged position of BTC, ETH, or eligible altcoins doesn’t produce anything on its own since the collateral stays within the loan structure. What the borrower receives is usable capital, separate from and independent of whatever is held in custody. What happens to that capital is a separate question entirely.
The yield section of the loan calculator exists to frame that question before the money moves. It doesn’t project returns or recommend allocations. It shows the relationship between what a given market opportunity might produce and what the crypto-backed loan yield needs to clear to justify the financing cost.
The Baseline: Capital Received Is Not Capital Earned
The calculator begins with net fiat or stablecoin proceeds — the amount a borrower receives after upfront costs are deducted. Origination, first-year interest, applicable fees — all subtracted before the number that funds actually reaches a wallet. What remains is the deployable base.
Gross yield and net yield after financing appear separately. A strategy producing 8% gross against a 4% financing cost shows positive carry. The arithmetic is fairly straightforward. The execution however, which covers counterparty risk, lockup terms, collateral requirements, orderly exits, maybe less so.
Structured Yield
Privately negotiated yield arrangements, OTC structures, treasury deployment programs — capital placed with a counterparty under defined terms to generate a return. The appeal: stablecoin proceeds go to work and the spread over financing cost justifies the loan.
The gap between a quoted rate and a realizable return is where most of the risk sits. Lockup periods, mandate drift, counterparty quality, liquidity on exit during stress — none of those are captured in a headline rate. A 10% quoted return and a 10% realizable return are rarely the same number once those variables are priced in.
Obsidian doesn’t provide structured yield services. Introductions to firms in our network happen occasionally and on a purely informational basis. Those relationships, their terms, and their outcomes are separate from the loan. Borrowers make their own allocation decisions.
Basis / Cash-and-Carry
When demand for leveraged long exposure pushes futures prices above spot, a basis trade attempts to capture that spread with hedged directional exposure. Stablecoin proceeds fund the cash leg or provide the margin base. The trade doesn’t depend on price direction — it depends on the persistence of the spread.
Basis compresses. Margin requirements rise. Exchange outages tend to coincide with the moments liquidity matters most. The calculator shows a market range, not a rate. The borrower bears execution, venue, and liquidity risk throughout.
Options Selling
Selling calls, selling puts, short strangles, managed volatility programs — premium received in exchange for taking volatility or tail exposure. Crypto implied volatility creates meaningful premium. The offset is that the premium is paid because the underlying risk is real.
Short volatility strategies can look stable for extended periods. When they don’t —discontinuous price moves, volatility repricing, margin calls compounding — the drawdown can arrive faster than the income that preceded it. The calculator separates gross opportunity from net yield after financing for exactly this reason. A high gross number attached to a fragile loan structure is a different proposition than the same number with room to absorb interruptions.
Execution Reliability: The Variable Most Borrowers Miss
Gross yield doesn’t change because a borrower selected a lower LTV or a longer term. Five million dollars of stablecoin proceeds is five million dollars of deployable capital regardless of how the loan is structured. What changes is the borrower’s ability to keep a strategy running.
Higher LTV leaves less room before a margin event. A longer term extends the period over which market conditions can shift. Different collateral buckets carry different volatility assumptions — BTC and ETH aren’t treated the same way as altcoins; Binance-listed tokens aren’t treated the same way as other approved assets. All of those inputs affect the buffer a borrower has when markets stop cooperating.
Execution reliability, as shown in the calculator, is a continuity indicator — not a return estimate. The question it answers is whether the loan structure provides enough room to keep capital deployed long enough for the strategy to matter. A “High” score means room exists. “Fragile” means it doesn’t. Neither is a forecast.
Margin Mechanics: Why This Isn’t DeFi
The calculator’s margin logic follows a traditional secured lending framework. Margin call levels are set at inception, expressed relative to collateral value at closing. A four-day cure period applies after a margin call. There is no automated liquidation.
Borrowers who arrive with DeFi-native assumptions — continuous repricing, real-time LTV dashboards, programmatic execution — are working from a different model. The JTSA structure is manual, pre-agreed, and governed by loan documentation. Trigger thresholds don’t update mid-loan. Enforcement follows an uncured default and is exercised at lender discretion in accordance with the agreement.
The calculator is an explanatory tool. It isn’t the agreement. For a full explanation of how margin calls and defaults are sequenced, see How Margin Calls Work.
What the Model Includes
The calculator reflects origination fees, first-year interest deducted from proceeds, applicable management fees, full-term interest obligations, annual fees after closing, collateral required to receive the requested net proceeds, margin call and catastrophic default levels, indicative market yield ranges, and net yield after financing cost. Execution reliability is derived from the loan structure and collateral bucket.
That makes it a planning tool. It shows what a loan structure implies before capital is deployed elsewhere.
What the Model Doesn’t Include
Individual trade pricing, live execution data, borrower-specific suitability, counterparty-specific terms, tax consequences, market volatility, the assumption that any strategy can be held without interruption — none of those appear in the calculator.
Emergency liquidity needs, treasury policy constraints, governance approvals, exchange-level margin changes, and off-market execution costs aren’t modeled either.
Yield ranges are indicative. They show the relationship between financing cost and market opportunity. They don’t recommend a strategy.
Where Obsidian Intervenes
The role here is to structure and facilitate lending against eligible digital assets —helping borrowers understand loan terms, collateral requirements, proceeds, margin mechanics, and repayment obligations. We don’t manage borrowed capital, provide investment management, or execute any of the three strategies illustrated in the
calculator. We don’t represent that any illustrated yield is achievable.
Where appropriate, referrals to firms in our network are informational. Any engagement with those parties is subject to the borrower’s own diligence, legal review, and risk controls, and is separate from the loan in every respect.
The point of the yield section is a single, practical question: can the use of proceeds clear the cost of financing after realistic constraints? The structure that supports the strategy determines how much room there is when the answer is no.
Common Questions
All loan mechanics described here are governed by the Master Loan & Security Agreement and applicable Closing Statements. This page is an explanatory resource only and does not constitute investment advice, a solicitation, or a binding offer. Indicative yield ranges are illustrative and do not represent achievable returns. Market risk remains with the borrower. Digital asset lending involves substantial risk, including potential loss of collateral.