If a borrower can’t repay the loan and he has collateralized a real estate. Who’s going to sell the house in order to the get the liquidity?
Does The protocol own the real estate through the NFT?
In traditional finance, the bank owns the real estate and it sells the house in order avoid losses.
In the case of New Silver, the assets are placed in a bankruptcy-remote SPV which, in a case of a major default, would liquidate the collateral and repay investors in order of preference (drop first, then tin). This would only be triggered if there are many properties that default on payment, if it’s a few, they would simply be liquidated on a secondary market and should not have any material impact on pool’s investors.
Is the SPV decentralized?
in the second case, Who’s going to sell properties on the secondary market?
In our case, the SPV has an independent manager, in case of a major default event, the independent manager would hire a person or a firm and liquidate assets.