> ## Documentation Index
> Fetch the complete documentation index at: https://docs.mezzamine.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Collateral & Security

> The layered collateral structure, coverage maintenance, hedge margin treatment, and legal package.

Each program is secured by a combination of BTC reserves pledged to the program, pledged hashrate with block rewards routed to a monitored address, ASIC hardware, power purchase agreements and hosting contracts, and infrastructure and other real-world mining assets.

Collateral coverage is established at program inception and maintained throughout the life of the facility through continuous monitoring of BTC price, mining profitability, network difficulty, and collateral market values. If coverage ratios fall below required thresholds, the borrower may be required to pledge additional collateral.

## Collateral efficiency

Mezzamine requires **as low as 20% of principal posted in BTC**, against 150% or more for a BTC-only facility, making it far more capital efficient. This is enabled by Mezzamine's mining-specialized and hedged structure, which allows ASICs to be underwritten as part of the collateral package.

|                          | BTC-only facility       | Mezzamine                  |
| ------------------------ | ----------------------- | -------------------------- |
| Total coverage           | About 150% of principal | About 150% of principal    |
| Posted in BTC            | About 150% of principal | As low as 20% of principal |
| Fleet and pledged assets | Not counted             | Assessed into the package  |

Coverage does not change. Its composition does. The Bitcoin that would otherwise be locked stays unencumbered and available for power, payroll, maintenance, margin, and operating contingencies.

Pledged ASICs are credited at an assessed value rather than at market. Hardware is discounted by roughly 30% to 50% before entering the package, so \$1 million of machines supports about \$500,000 to \$700,000 of collateral value. That assessed value is then denominated in BTC to stay aligned with the loan.

Two conditions make the fleet financeable. Production is verified at the source through pool, wallet, and power data, which establishes what the machines earn. And the program hedge is designed to create value during the same BTC decline that compresses ASIC prices, which breaks the correlation that has historically kept lenders from crediting hardware at all. The hedge is covered on its own page: [Fleet Hedging](/for-miners/asic-financing/fleet-hedging).

## Hedge margin and LTV

Hedge margin is held separately from loan collateral and is not counted toward LTV. What happens to hedge margin and profits at repayment and in default is covered under [Fleet Hedging](/for-miners/asic-financing/fleet-hedging).

## Legal Structure

Every Mezzamine loan is supported by a complete institutional legal package, structured to ensure that all rights are documented and enforceable. The standard documentation includes:

* The **Loan Agreement** governing economic terms, repayment obligations, collateral rights, and default provisions.
* The **Promissory Note** evidencing the borrower's obligation.
* The **Security Pledge Agreement** establishing the lender's first-lien interest in pledged collateral.
* **UCC-1 Financing Statements** filed against pledged assets to perfect the security interest.

Specific program structures may include additional documentation depending on the borrower profile and collateral composition.