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With Trilobyte, whitelisted borrowers can borrow digital assets without providing digital assets as collateral in advance. Instead, they use their future cash flows to secure repayment of their loan.
Built on Soroban, Stellar's new native smart contract platform, Trilobyte connects Investors and Borrowers thanks to the power of blockchain technology.
The ecosystem consists of 5 key entities:
Reputable organisations looking for additional working capital to finance their operations.
The equivalent to a loan in traditional finance, the Vault is a special-purpose receptacle for receiving the agreed cash flows. It is represented by a smart contract on the Stellar Soroban platform. Vaults can be permissioned or permissionless.
A permissioned vault is a smart contract which terms are agreed between borrowers and investors. This type of vault is more suitable for a small group of investors that already know the Borrower and will use Trilobyte as the infrastructure to execute their agreement via a smart contract. Some of features of these type of vaults are:
- 1.No direct involvement of the Treasury in the loan terms negotiation.
- 2.Loan underwriting, default scenarios, late payments handling, etc will be agreed between borrower and investor(s).
- 3.Only investors involved in the loan terms negotiation are able to participate.
- 4.More suitable for investors that want to loan a large amount of money and would therefore want more control.
In contrast, a permissionless vault is a smart contract which terms are defined between borrowers and the Trilobyte Treasury without direct participation of investors. Some of the features of these type of vaults are:
- 1.Loan underwriting, default scenarios, late payments handling, etc will be agreed between borrower and The Treasury.
- 2.Any investor is willing to participate (as long as the investor pass the vault verification requirements)
- 3.More suitable for investors that want to loan small amounts and for borrowers looking to crowdsource their loans
The Trilobyte protocol will start supporting permissioned vaults first. Once operational, the team will focus on adding support to permissionless vaults.
Payment Actors are third party vehicles through which the cash flows that serve as source of repayment are channelled in a Cash Flow Financing lending scheme.
Payment Actors can be independent persons or entities who regularly pay funds to the Borrower in the normal course of the Borrower’s business activities. These are generally the clients or customers of the Borrower’s business or other parties, such as management entities or electronic payment platforms, who owe regular payments to the Borrower in the normal course.
These regular payments constitute the cash flows that can be captured in a cash flow finance scheme by directing the Payment Actors to make all future payments to the Vault for subsequent redistribution between the Investors and the Borrower in accordance with the agreed terms of the transaction.
Private individuals and/or businesses who transfer digital assets into one or multiple Vaults as investment vehicles. Their main interest is to profit from the yield generated by the Vaults.
Initially managed by the Trilobyte team, the Treasury is the entity responsible for whitelisting Borrowers, creating Vaults and monitoring to ensure that Payment Actors meet their agreed payment obligations.
In the future, The Treasury will be managed by a DAO token governance model.
Investors deposit digital assets into a Borrower's Vault and earn yield. They receive tokens from the Vault representing a share of the total funds deposited in the Vault. Upon expiry of the agreed term, the Investors submit a withdraw request (by returning their tokens) in order to receive the underlying assets representing the value of their vault tokens.
Borrowers negotiate (outside the protocol) loan terms (i.e. interest rate, maturity period, payment terms) with the Treasury or Investors after being whitelisted. They also provide information concerning the Payment Actors and the cash flows that will be making up their loan repayments.
Once the loan terms have been agreed, and a binding legal contract signed between all relevant parties (Treasury or Investors, Borrower and Payment Actors), the Borrower receives a Vault that can be funded by Investors.
Borrowers will pay interest on the amounts borrowed.
Payments made to The Vault by the Payment Actors are distributed between the Investors and the Borrower in the agreed manner.
Payment Actors are individuals or entities who have a legal obligation to pay the Borrower for goods or services they receive. But, instead of paying directly to the Borrower, they receive an irrevocable payment instruction from the Borrower to pay into the Vault.
The Treasury is in place for the collection and management of the revenues of the Trilobyte protocol. The revenues are used to finance the development of the protocol.
Furthermore, the Treasury is also responsible for onboarding Borrowers as well as monitoring transactions to ensure that all parties perform correctly.