Property Collateral Onboarding Process

As mentioned in the previous section on protocol governance, the main asset to be onboarded to the DAO will consist of real estate collateral. The entity wishing to onboard, should keep previously mentioned procedure in mind and submit an RFC according to the property collateral onboarding application process outlined here:

Collateral Providing Entity (Tokensisation Service)

1. Who is the interested party for this collateral application?

2. Provide a brief high-level overview of the project, with a focus on the applying collateral token.

3. How long has the project been live in production?

4. Describe the type of collateral asset.

5. How is the asset used and does it give any rights to holders? (e.g. financial claims, dividends, governance rights)

6. What is the market value of the asset?

7. Where does exchange for the asset occur?

8. Is the asset settled on chain (trustless) or off chain (trusted)?

9. (Optional) Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

10. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.

11. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.

Individual application for a property of an onboarded collateral provider:

1. Provide (a) proposed legal structure for transaction, including: type of legal entities, (offshore/onshore, form (trust, corporate, other)) and jurisdiction(s) of legal entities, and (b) likely funds flow (HGBP => Fiat => HGBP).

2. Provide details on the organizational structure of the interested party, beneficial ownership, governance/control, key personnel, capital/funding resources and past financial performance.

3. Provide detailed summary of the proposed economic terms of the transaction, including, without limitation: principal amount, interest rate, frequency of principal and interest payments, disbursement schedule, equity amount, funding ratios (equity/debt pro rata, equity first, etc.), collateral security, coverage ratios, currency (if not DAI) and other material terms. The quality of the proposed economic terms will be a consideration for the prioritization process.

4. Identify in reasonable detail the risks associated with this collateral application and the underlying asset(s) and proposed mitigants (if any). The risk summary should address, without limitation and to the extent relevant: market risks, commercial risks (e.g., diversification, credit, etc.), interest rate risks, legal and regulatory risks, general industry risks, competition, etc.

5. Outline the applicant’s risk monitoring and operations guidelines/policies (e.g., charge-offs, collection, recovery provisions, data collection and technology, etc).

6. Describe the regulatory regime applicable to the underlying asset (if any) and the applicant’s legal and compliance program relating thereto.

7. Identify any 3rd party persons likely to be relied upon by applicant to implement the transaction (legal, accounting, servicers, trustees, etc.).