The system will allow Sellers to create new loan issuance, and allow Buyers to engage the outstanding loan .
Seller, who is the lender of the loan. Usually the Foundation who wants to provide liquidity to token investors;
Buyer, 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 information to the loan contract;
Financial Service Providers have created loan instruments using the NUTS Technology Platform;
The diagram below depicts the process flow of the loan contract. The link to edit the diagram is here.
Seller creates new loan issuance using the selected loan instrument;
Seller deposits the borrowed token to the loan issuance;
Buyer searches loan issuance in the marketplace and engages to the target issuance;
Buyer deposits the collateral token. The borrowed token is available for withdrawal by the buyer;
Buyer pays back the borrowed token plus interest token; the collateral token is available for withdrawal by the buyer.
If the seller 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 buyer fails to pay back the borrowed token plus interest, the loan issuance becomes delinquent.
Below are the states of a loan contract.
Initiated: The loan issuance is created;
Engageable: The seller has deposited the borrowed token so that the loan issuance can be engaged by buyer;
Active: Buyer engages the loan issuance;
Complete Engaged: Buyer pays back in time;
Unfunded: The sellers fails to deposit the borrowed token in time;
Complete not Engaged: The issuance expires with no engagement;
The buyer fails to deposit the collateral;
The buyer fails to pay back the borrowed token in full in time.