I don’t understand how will someone be able to get their money back if they lend it and the borrowers property receipt is digitally kept in contract?
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Each asset in every pool has a certain maturity date when it has to be paid back. It vThis concept has to be understood by every investor before investing in a pool.
It varies from short-term (30 days) up to long-term (12-24 months) and depends on the underlying asset
More details can be found in the Investor onboarding guide
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Good day Harsh
On Tinlake we have 2 different tranch: Senior and Junior with separate tokens. TIN for Junior tranch and DROP for senior. (In Centrifuge App you could have more than 2 tranches, for example Junior, Senior and Mezzanine, or even just one tranche, please read the description of each pool).
In the event of a default case, the junior tranche (TIN) takes losses first — and earns a higher, variable yield. The senior tranche (DROP) is protected by the junior tranche as a result — and it earns a lower yield.
The DROP and TIN yields should reflect the risk taken on by investors.
Depending on what percentage of the pool the junior tranche is (a.k.a. TIN Buffer) and the amount of the default, a default could affect only TIN returns or affect both TIN and DROP returns negatively.
In the case of a healthy TIN buffer and a small amount of assets defaulting, DROP returns are likely to not be impacted at all. The securitization and structure of the pool should protect the senior tranche fully here.
What does a default look like on Tinlake? There are two main components:
- On-chain technical process
- Off-chain legal process
You can read the full explanation post with on-chain and off-chain process here:
In case if you still have any questions or doubts feel free to ask them here on the forum.
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