Only loans that have reached a terminal state count toward the default rate. Active loans are excluded — they haven't had the chance to settle yet, so including them would artificially deflate the rate. Listed (un-funded) loans are also excluded by definition.
"Settled" means the lender invoked Flowty.settleFunding(...) after the loan matured unrepaid, claiming the NFT collateral. "Repaid" means the borrower (or autopayment) returned the principal plus interest before maturity. Cancellations (LoanCancelled events) reflect a borrower withdrawing the listing before funding and are excluded from the rate calculation entirely — they were never a credit decision.
The rate is computed as settled / (repaid + settled), expressed as a percentage. Lifetime sits around 4.62% as of the latest cutoff. Windowed views (L30, L90) commonly read close to 0% because most recent loans are still active and haven't had time to either repay or settle.
Pre-window loan closures are tracked separately. The 118 grace-period settlements during Flowty's official Limbo Loan window (Jan 30 – Feb 13 2026) are not folded into the lifetime default rate, since those loans were originated before our scan window and represent a different credit cohort. They're surfaced on the dashboard's "Pre-window loan closures" section instead.