📎Fund and Information Flow
Fund and Information Flow
Collateral Securitization
To help manage the risk associated with P2P lending, the collateralized asset would be tokenized and would be minted before the smart contract is disbursed to all lenders where the value of the NFT is fixed as a reflection of the loan value at the point of offering.
The NFT would then create an immutable, transparent track record of the loan’s payment details that can be publicly verified together with the collateral value. At the end of the loan period, the NFT would be transferred back to PeerHive’s wallet to be burned as it reaches the end of the NFT’s useful life.
Funds and Information Flow Diagram
Phase I
Application:
PeerHive receives the application for financing from the borrower. PeerHive would assist the borrower to obtain a successful listing of DLC on the PeerHive platform.
The application received will conduct initial checks that are in line with the Pre-Selection compliance check.
Given the application met all the criteria set out by the Pre-Selection compliance check, all information will be compiled and pushed to the next phase.
Information Transfer
The PeerHive team will create a lending note with all the information gathered during the application and information discovery phase.
All the information compiled will be presented to the Lender (Left-Hand Side) together with the Lending Teaser, Audited Report and the Company outlook directly.
Governance
At the same time, the lender is given the opportunity to scrutinize PeerHive information gathering SOP as well as a compilation.
As the lending terms and amount are being agreed upon by all parties, a master agreement and additional terms will be sent to the Borrower to be approved.
Phase II
Smart Contract
As the master agreement and additional terms are accepted by the board or by the financial department of the borrower.
Terms set out, will be added to the Smart Contract.
Transferring Principal Amount
The Smart Contract with the terms set out will be triggered with the principal amount being transferred to the borrower.
As the principal amount is not held by PeerHive, the cryptocurrency is being directly credited from the lender's wallet.
Interest Payment
During the course of the loan period, the interest payment will be set out in accordance with the term of the loan.
At the same time, clear and precise communication between the Borrower and the Lender must be held to ensure proper checks and balances are met while the financial health of the borrower is ensured.
Smart Contract Flows (potential)
PeerHive utilize Master-Child contract relationship
By using a master-child smart contract arrangement, peer-to-peer (P2P) lending can be made viable without the need for PeerHive to handle the transfer of cryptocurrency between lenders and borrowers. This would allow PeerHive to offer a lower fee for conducting crowdfunding for all P2P financial arrangements. Additionally, the use of smart contracts to control the transfer of funds would enable a faster processing time from accumulation to distribution, with the cryptocurrency being transferred directly to the borrower's wallet.
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