# Credit Slasher

The credit slashing module executes three strategies for deterring defaults, namely (1) slashing the 3Jane score which decreases future credit line sizes and increases future interest rates (2) pooled upside model where a portion of late interest repayments from defaulters is distributed pro-rata across all existing merchants (3) initiating a non-performing (NPL) auction which engages collections agencies to pursue legal recourse within the United States legal system.

<figure><img src="/files/ETztgNaxnYyUqj6aAblM" alt=""><figcaption></figcaption></figure>

The credit slashing module executes a series of strategies for deterring defaults:

**Carrots**

1. continued $JANE emissions for maintaining a healthy state
2. gradual increase in Jane Score which increase credit limit and decreases implied rates &#x20;
3. late penalties from defaulters is distributed pro-rata across all healthy merchants which decreases all-in implied rates

**Sticks**

1. slashing accrued $JANE balance, pro-rata based on days since default. Slashed $JANE is redistributed across existing merchants.&#x20;
2. slashing Jane Score which decreases future credit line sizes (or excludes entirely) and increases future implied rates
3. initiating a non-performing (NPL) auction which engages collections agencies to pursue legal recourse within the United States legal system.

Note: 3Jane does not currently furnish to traditional credit bureaus. This is due to the fact that direct litigation is much higher ROI.


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