Credits are a type of Flexible Commitment, made by an Associate to the Project, that represent earned value in that Project.

• They have a fixed nominal value (denominated in a currency) and are functionally similar to a shareholder loan in the conventional economic system.
• Credits belong to the Equity priority group and rank below Superflex in the payment hierarchy.
• Credits do not have a fixed due date; they are paid out through a Credit Buyback Resolution when the Project has sufficient available cash.
• They carry a high risk factor, since repayment is conditional on the Project having enough Net Excess Cash (80% by default).
• The discounted value of credits is calculated by discounting it by the 80% risk factor; meaning that a credit of 100 EUR has a discounted value of only 20 EUR. with the 80 EUR discount compensated by the issuance of Tokens.
• To compensate for this risk, the Project issues Tokens to the Associate. The value of these Tokens is equal to the discount applied to the credit.
• For example, if a credit of 100 EUR is issued, the Associate receives tokens worth 80 EUR at the current token index (e.g., 16 tokens if the Token index is 5 EUR/token).