Overview
Once a private credit facility is originated, most of its ongoing cost is administrative: tracking collateral, reconciling cash flows, generating reports for investors and regulators, and distributing payments across every party with an interest in the facility. That work has historically run on spreadsheets and PDFs, and it does so even at institutions managing billions in assets. The expensive part of private credit is not the credit decision but everything that follows it. Blockchain infrastructure lets those functions run against a shared, continuously updated record instead.
Why Credit Administration Is Expensive to Run Manually
Administering a facility means tracking collateral value and eligibility continuously, reconciling cash received against amounts owed across potentially dozens of loans inside a single facility, generating investor and regulator reports on a fixed schedule, and distributing payments accurately to every party with a claim on the facility's cash flows. Each task is manageable at small scale. As loan and facility counts grow, the manual process becomes the binding constraint on how much credit an institution can administer, independent of how much capital it has available to deploy.
How Shared Infrastructure Reduces Administrative Cost
When collateral tracking, cash reconciliation, and reporting run against the same infrastructure that recorded the loan's origination, most of the administrative work becomes automatic. Payments distribute according to pre-set logic as soon as cash is received, collateral value updates in real time rather than through periodic review, and reports generate from the underlying ledger without a separate reconciliation step. The economics change shape as a result: credit administration moves from a linear cost that scales with loan volume to a largely fixed infrastructure cost.
Credit Administration Infrastructure on Avalanche
Fence, a debt administration platform, automates the back office of asset-backed finance: collateral tracking, cash reconciliation, reporting, and payment distribution, functions institutions have traditionally run on spreadsheets and PDFs. Fence administers roughly $1.5 billion in assets for clients including BlackRock and Fortress, and reports cutting middle-office costs by 90% and total cost of debt by up to 30%. Its live pilot on Avalanche has generated $99.5 million in volume, with $3 million in committed capital recycled 16.4 times into $49.3 million of assets financed at a 99% repayment ratio, a level of capital efficiency that manual reconciliation would not support.
Fence operates alongside other institutions building the same layer. Valinor runs a live SPV credit facility on Avalanche's C-Chain together with OatFi and Fence, which connects origination, servicing, and administration across a single facility rather than requiring a separate system for each function.
What This Means for Your Company
For a private credit fund, asset-backed lender, or debt administration provider, moving servicing and administration onto shared infrastructure reduces the operational cost of managing a growing loan book. Rather than adding headcount or middle-office spend as facility count grows, the infrastructure absorbs most of the reconciliation and reporting burden. That shows up as a lower total cost of debt for borrowers, better capital efficiency across facilities, and faster reporting for investors and regulators who need visibility into performance.
The savings are administrative, and administrative savings are not credit performance. Fence's 99% repayment ratio and 16.4 turns of committed capital describe a $3 million pilot rather than a cycle-tested book, and no reconciliation engine changes what a facility recovers when a borrower stops paying. The back office is now a fixed cost. The credit is still the variable one.