Nested Amortization

Definition ∞ Nested amortization describes a financial or accounting method where the repayment schedule for a debt or asset is structured with multiple layers of principal and interest calculations. This often occurs in complex financial instruments or project finance where different tranches of debt have varying repayment terms and priorities. It involves calculating amortization for individual components that are themselves part of a larger amortizing structure. This method manages complex repayment streams.
Context ∞ While not a direct term in everyday crypto news, the principles of nested amortization can apply to complex decentralized finance lending protocols or tokenized debt structures. Discussions might involve how repayment priorities are coded into smart contracts for various collateralized debt positions. Future developments could see more sophisticated on-chain financial products requiring such detailed repayment scheduling, particularly as institutional participants enter the DeFi space with structured products.