Payment

Svim Finance, together with our asset partners where applicable, manage the loan payment process for tokenized RWA liquidity pools. The process involves several key steps and features to ensure smooth repayment of principal and interest by the borrower. This process accommodates the conversion of fiat currency payments into stablecoins, which are then distributed to the investors or liquidity providers. Below is a step-by-step explanation:

Features of Loan Payment Process

Automated Payment Tracking:

• Payment Schedule: Clear schedule for principal and interest payments, integrated into the smart contract.

• Notifications: Automated alerts to both the borrower and the platform when payments are due.

Fiat-to-Stablecoin Conversion:

• Third-Party Provider: Use of a trusted third-party provider to convert fiat currency payments to stablecoins.

• Seamless Integration: Integration of the conversion process within the platform to minimize delays and reduce transaction complexity.

Secure Transactions:

• Blockchain Security: Use of blockchain technology to ensure transparency and security of transactions.

• Wallet Whitelisting: Only pre-approved wallets can interact with the payment system to prevent fraud.

Proceeds Distribution:

• Smart Contracts: Automated distribution of stablecoin payments to investors' or liquidity providers' wallets according to their share in the pool.

• Yield Calculation: Accurate calculation of yield based on the loan agreement terms.

Process of Loan Payment

Payment Due Notification:

• Automated Reminders: Borrower receives automated reminders about upcoming payment due dates.

• Payment Details: Notification includes payment amount, due date, and payment instructions.

Fiat Payment by Borrower:

• Bank Transfer: Borrower transfers the repayment amount (principal + interest) in fiat currency to the third-party provider.

• Confirmation: Borrower receives confirmation of the payment receipt from the third-party provider.

Fiat-to-Stablecoin Conversion:

• Conversion Execution: The third-party provider converts the received fiat currency into the designated stablecoin (e.g., USDT, USDC).

• Transaction Fee: Any applicable conversion fees are deducted during this process.

Stablecoin Transfer to Platform:

• Stablecoin Transfer: The third-party provider transfers the converted stablecoins to the platform’s designated wallet.

• Verification: Platform verifies the receipt of the stablecoins and updates the borrower’s repayment status.

Distribution to Investors:

• Smart Contract Activation: The smart contract automatically triggers the distribution of the stablecoins to investors' or liquidity providers' wallets.

• Proportional Distribution: Stablecoins are distributed proportionally based on each investor’s or liquidity provider’s share in the pool.

Yield Calculation and Update:

• Yield Allocation: The smart contract calculates the yield earned by each investor or liquidity provider.

• Dashboard Update: Investors can view their updated balances and yield earned on their dashboard.

Outcome Scenarios

On-Time Payment:

• Scenario: The borrower makes the payment on or before the due date.

• Investor Return: Investors receive their principal and expected yield as per the loan agreement.

• Impact: Positive outcome, maintaining trust and stability in the liquidity pool.

Late Payment:

• Scenario: The borrower makes the payment after the due date but within the grace period.

• Investor Return: Investors receive their principal and yield, potentially with additional late fees.

• Impact: Neutral outcome, with minor delays but still retaining investor confidence.

Partial Payment:

• Scenario: The borrower makes a partial payment.

• Investor Return: Investors receive a portion of their principal and yield corresponding to the partial payment.

• Impact: Mixed outcome, requiring follow-up for the remaining balance.

Missed Payment:

• Scenario: The borrower fails to make the payment within the grace period.

• Investor Return: Recovery process is initiated, potentially leading to collateral liquidation.

• Impact: Negative outcome, impacting investor returns and confidence.

The loan payment process in a real-world assets tokenization liquidity pool ensures that borrowers can repay their loans seamlessly while converting fiat currency to stablecoins. This process involves automated notifications, secure transactions, fiat-to-stablecoin conversion by a third-party provider, and smart contract-enabled distribution of proceeds to investors. The process aims to maintain transparency, security, and investor confidence while providing stable and sustainable returns.