Hey @Ste nice to e-meet you. Great questions! Please find my answers below, and I welcome other community members with relevant experiences to also chime in.
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Per the article, this varies widely for different asset classes and it’s more about managing the process. For example, it can go to collections, or be sent to a service provider for repossessed and liquidation (or the issuer can do it themselves!). It depends on the asset class and the agreements in place; unfortunately there is no one size fits all answer here.
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To clarify: do you mean as an end-borrower or as an issuer on Tinlake, which typically aggregates the assets across end-borrowers? As an end-borrower, your personal credit score could be impacted or if you are an institution, then you might find it harder to get funding. As an issuer on Tinlake, the beauty is that your repayment history is all on-chain, and available for all to see. Ideally that should be a good incentive to keep up performing loans, especially if you want to fund more in the future.
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Not better or worse than TradFi, but a decentralized group of underwriters (like the Credit Group) should have less single points of failure.
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The issuer SPV should own the collateral, but in the case of bad actors, double-levering could, in theory, happen. In the new legal structure, for any issuer with a trustee, the trustee will file a UCC 9-310 to perfect the security interest and priority so it would not matter if the SPV re-pledged the asset.
5a) You can look at the pricing on Tinlake. Without the CFG rewards, the pricing is actually comparable to TradFi. And no, I don’t think it’s fair to say that. Many of our issuers have external funding sources (banks, family offices, private investors, etc.), and Tinlake is just one of them.
5b) Yes, with a black swan event. That is also why having diversification and decentralization is important.