Underwriting Private Credit: A Case Study on Midas mF-ONE
Morpho curators set a static 7.7% discount on mF ONE when they listed it as collateral. They have not changed it since. On January 31, the effective instant redemption capacity for this asset dropped to $55. This report examines whether a static discount captures the actual risk.
1. The Asset
mF-ONE is Fasanara Capital's F ONE private credit fund, tokenized by Midas as an ERC-20 (a standard token format on Ethereum) on Ethereum. The underlying strategy spans invoice financing, SME (small and medium enterprise) lending, and real estate backed credit across European and emerging markets.
As of February 28, 2026: 98.27M gross token supply at $1.0608 per token (oracle verified onchain). However, 34.92M tokens (35.5% of supply, worth $37M) sit in the redemption vault awaiting processing, leaving net circulation at 63.35M tokens ($67.2M).
Approximately 23 onchain holders and a 7D trailing APY (annual percentage yield) of 12.63% as reported by the protocol, though this reflects a short window and may not represent long term returns. The fund accrues value through its NAV (net asset value), which updates periodically as loan payments flow in and portfolio marks adjust.
| Contract | Address |
|---|---|
| mF-ONE Token | 0x238a700eD6165261Cf8b2e544ba797BC11e466Ba |
| mF-ONE/USD Oracle | 0x8D51DBC85cEef637c97D02bdaAbb5E274850e68C |
| Issuance Vault | 0x41438435c20B1C2f1fcA702d387889F346A0C3DE |
| Redemption Vault | 0x44b0440e35c596e858cEA433D0d82F5a985fD19C |
mF-ONE is already used as collateral on Morpho (a DeFi lending protocol), where Steakhouse and K3 curators have set a static 7.7% oracle discount. That discount has not changed since the vault launched. The LLTV (Liquidation Loan to Value) is 91.5%, which gives an effective LTV (loan to value) of 84.45% and maximum leverage of 6.4x.
The question: is 7.7% the right number? And more fundamentally, should the discount be a fixed number at all?