NUTS Platform Docs
2.0.0
2.5.02.0.01.0.0
2.0.0
2.5.02.0.01.0.0
  • Introduction
  • Opportunity
    • Multiple Classes of Financial Instruments
      • Financial Instruments Supported
    • Reducing Barriers to Entry
    • Customization and Compatibility
  • Architecture Overview
    • Design Principles
    • Domain Model
    • Access Control
  • Implementation
    • Escrow
      • Common Functionalities
      • Instrument Escrow
      • Issuance Escrow
      • Deposit Escrow
    • Instrument Manager
    • Instrument Registry
    • Common Oracles
      • Timer Oracle
      • Price Oracle
    • Protobuf Solidity Generator
    • Interactions
      • Interaction - Instrument Management
      • Interaction - Issuance Creation
      • Interaction - Issuance Engagement
      • Interaction - Token Deposit
  • Platform Upgrade
  • API Reference
  • FSP Guidebook
    • Principles
    • Use Cases
      • Loan Instrument
      • Lockup Instrument
      • PIPE Instrument
      • ESOP Instrument
  • Appendix
    • FAQ
    • Glossary
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On this page
  • Use Case Description
  • Actors
  • Preconditions
  • Process Flow
  • Main Process Flow
  • Alternative Process Flow
  • Loan States

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  1. FSP Guidebook
  2. Use Cases

Loan Instrument

A financial instrument that provides liquidity for investors or allows foundations to earn interests on excess capital.

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Last updated 5 years ago

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Use Case Description

The system will allow Makers to create new loan issuance, and allow Takers to engage the outstanding loan .

Actors

  • Maker, who is the lender of the loan. Usually the Foundation who wants to provide liquidity to token investors;

  • Taker, who is the borrower of the loan. Usually the token holders who want liquidity;

  • Timer Oracle, who is an external timer service provider that provides timing triggers to the loan contract.

Preconditions

  • Financial Service Providers have created loan instruments on the NUTS Technology Platform;

Process Flow

The diagram below depicts the process flow of the loan contract.

Main Process Flow

  • Maker creates new loan issuance using the selected loan instrument;

  • Maker deposits the borrowed token to the loan issuance;

  • Taker searches loan issuance in the marketplace and engages to the target issuance;

  • Taker deposits the collateral token. The borrowed token is available for withdrawal by the taker;

  • Taker pays back the borrowed token plus interest token; the collateral token is available for withdrawal by the taker.

Alternative Process Flow

  • If the maker fails to deposit the borrowed token in time, the loan issuance becomes unfunded;

  • If the loan contract expires with no engagement, the loan issuance becomes complete with no engagement and will not be available for further engagement;

  • If the taker fails to pay back the borrowed token plus interest, the loan issuance becomes delinquent.

Loan States

Below are the states of a loan contract.

  • Initiated: The loan issuance is created;

  • Engageable: The maker has deposited the borrowed token so that the loan issuance can be engaged by taker;

  • Active: The taker engages the loan issuance;

  • Complete Engaged: The taker pays back the borrowed token in time;

  • Unfunded: The maker fails to deposit the borrowed token in time;

  • Complete not Engaged: The issuance expires with no engagement;

  • Delinquent

    • The taker fails to deposit the collateral token in time;

    • The taker fails to pay back the borrowed token in full in time.