NFT+ Real estate Mortgage Lending, how does this proposal supported by MakerDAO community members work?

Rhythblockbeats reported today that the MakerDAO community voted to bring real assets into Maker, with most members saying they support a proposal to use coinage trade invoices and music streaming royalties as collateral for stable currency loans. The new proposal is led by a start-up called Centrifuge, which has developed a protocol that lets users convert real assets into marketable ERC20 tokens. Emulsion has cooperated with Paperchain and ConsolFreight to coin music streaming media royalties and trade invoices respectively.

So how does a smart contract that might introduce real assets as collateral into MakerDao work? Rhythmical BlockBeats will be briefly described in this paper.

After cooling, a supply chain financial operating system based on Ethereum allows users to convert real-world assets into cryptocurrency assets that can be used for DeFi.Financial applications built on public blockchains are expected to enable more people to use lending and other services because they do not require traditional financial institutions. For example, MakerDAO allows users to deposit digital currency denominated collateral to obtain DAI, a stable currency denominated in dollars. & have spent

Vogelsang, CEO of Centrifuge, says that today, opportunities for people to take part in DeFi are very limited because it requires users to have pure encrypted native assets. If the DeFi system allows users to use real assets that they already have in the real world, then it can attract these potential users. & have spent Let's let ethereum DApp, named Tinlake, let users convert real-world assets into securities with interest-bearing ERC20 tokens.

How does Tinlake work?

Tinlake is used by three different entities:

Borrower: Asset initiator, as mentioned above Paperchain or New Silver

A loan agreement, such as a Maker, that provides funds

The operator, Operator ) An entity that underwrites and evaluates assets and maintains a balanced portfolio

Tinlake is a set of smart contracts that convert real assets (such as car loans, commercial invoices or music streaming royalties) into non-homogeneous tokens (NFT) with the necessary legal documents, which are then securitised to issue Tin and Drop tokens. Anything that can be represented on the chain as NFT (non-homogeneous tokens) can be financed using the Tinlake infrastructure. Users issue ERC20, or Collateral Value Token (CVT), through NFT stored in the Tinlake contract. The CVT can be used to extract funds from encrypted lending protocols such as Maker.

Mr Vogelsang said the process was similar to the "junior" and "senior" parts of issuing securities - a common way of raising money in traditional ways. Tin tokens, like junior bonds, offer higher returns but also higher risk. The Drop token is like a senior bond, with low risk and stable return. The initiator of the asset will own a certain amount of Tin tokens, just like having some "skin" in the game. Tin token investors may prefer to be sophisticated traders who have a good understanding of real-world asset classes and want to attach a degree of leverage. Drop tokens are more suitable for further use in DeFi.

The specific working process of rhythmical BlockBeats is summarized as follows:

Borrowers submit NFTs representing real assets (for example, mortgages or invoices) to Tinlake. The operator underwrites the NFT and whitelist it. Whitelist carries out risk assessment of NFT, determines interest rate based on actual situation and determines guarantee ratio. After this process, the NFT becomes eligible as collateral.

When borrowers borrow against such collateral, Tinlake issues ERC20, or collateral value tokens (CVT), based on the value of the NFT. When a borrower deposits a loan in Tinlake, new CVT is cast as needed to draw on the loan.

The quantity of CVT cast is always equal to the value represented by NFT. This ensures that the value of the CVT will be stable relative to the value of the collateral, at $1.

If a new loan is secured by locking in a non-mortgage loan, new CVTs are cast to represent an increase in the value of the loan. If the borrower pays, the contract destroys the CVT quota and returns the NFT to the borrower. As the value of a single NFT representing a real asset increases or decreases, the number of CVT's adjusts.

For example, if an invoice is several days overdue, which increases the likelihood of default, then the invoice value may fall and the corresponding CVT number will be reduced.

Proper governance for Tinlake deployments is essential. The operator assumes responsibility for collateral management, including underwriting and valuing assets, and maintaining a balanced portfolio. In the case of payment default, collateral management management assets liquidation. The management of the collateral, & NBSP; The operator relies on the price predictor. In theory, the operator could be a single centralized entity, a set of intelligent contracts that automatically qualify and price assets, or a DAO that manages Tinlake deployments. Throughout the pilot, the team will first rely on the asset sponsor as the operator. In the future, the operator solution will be implemented through a decentralized network of asset underwriters. & have spent & have spent

Tinlake cases

Let's take Centrifuge for example, let's cooperate with trade finance startup ConsolFreight to carry out approvalization of freight invoices. Centrifuge also cooperates with Paperchain, a start-up company, to help its customers get their music flow royalties as early as possible and permit such royalties. In the latest MakerDAO community voting results, most community members strongly support a proposal put forward by Centrifuge and hope that approved freight invoices or music flow royalties can be used as collateral for cash loans. This practice is known in traditional finance as invoice factoring. & have spent

Resources:

https://medium.com/centrifuge/centrifuge-tinlake-adding-real-world-assets-to-mcd-68cbcb67e9a4

https://www.theblockcrypto.com/post/66406/

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