Smart contract-managed decentralized lending processes using collateral tokens that includes a conditional collateral sale stage

1 . A method comprising:

receiving, by one or more processing devices, a request to initiate a loan process from a user device, the request indicating a collateral item of a borrower, the collateral item comprising a unique collectible item; and

executing, by the one or more processing devices, a loan process smart contract instance that includes computer-readable instructions that are configured to manage a loan process in accordance with a loan process workflow, wherein the loan process smart contract instance is configured to execute the loan process workflow that includes:

initiating tokenization of the collateral item, wherein tokenization of the collateral item includes:

generating a virtual representation of the collateral item, wherein the virtual representation includes a description of the collateral item and one or more media contents that respectively depict at least a portion of the collateral item, wherein the one or media contents comprise a photograph, a video, an image, or an audio clip;

generating a collateral token corresponding to the collateral item, wherein the collateral token is a non-fungible digital token that is stored on a distributed ledger and is redeemable by an owner of the collateral token for the collateral item, and wherein generating the collateral token comprises generating a unique token identifier that uniquely identifies the collateral token;

cryptographically linking the collateral token to the virtual representation of the collateral item, wherein cryptographically linking the collateral token to the virtual representation comprises digitally signing the unique token identifier using a private key/public key pair; and

assigning the collateral token to a first user account of the borrower on the distributed ledger by a writing a block to the distributed ledger to update ownership data of the collateral token to reflect a public key corresponding to the first user account;

initiating a pre-liquidation sale of the collateral item via a digital marketplace, wherein the pre-liquidation sale of the collateral item results in a buyer conditionally buying the collateral item for a conditional sale price such that the buyer is granted the collateral item should the borrower default on one or more loans that are secured by the collateral item, wherein at least a portion of the conditional sale price of the collateral item is used to secure at least a portion of the one or more loans that are secured by the collateral item;

updating the virtual representation of the collateral item to indicate the conditional sale price of the collateral item;

receiving a loan agreement notification indicating a set of loan term parameters of a loan agreement that were agreed to by a lender and the borrower, wherein the loan term parameters include a loan amount that the lender will receive, a set of repayment parameters, and a set of unlocking events, wherein the set of unlocking events include a loan repayment event that defines a first set of electronically verifiable conditions that must be met to determine that the loan has been fully repaid and a loan default event that defines a second set of electronically verifiable conditions that must be met to determine that the borrower has defaulted on the loan;

locking the collateral token in an escrow account on the distributed ledger until an unlocking event of the set of unlocking events is detected, whereby the collateral token is prevented from being redeemed or assigned to another account while the collateral token remains locked in the escrow account, wherein locking the collateral token comprises assigning the collateral token to the escrow account by a writing a block to the distributed ledger to update ownership data of the collateral token to reflect a public key corresponding to the escrow account on the distributed ledger; and

instantiating a loan smart contract instance that includes computer-readable instructions that are configured to manage repayment of the loan based on the set of loan term parameters;

monitoring, by the one or more processing devices executing the loan smart contract instance, the distributed ledger to determine a repayment status of the loan in accordance with the loan term parameters to detect an occurrence of any of the set of unlocking events;

in response to detecting an occurrence of the loan repayment event, (i) transmitting, by the one or more processing devices executing the loan smart contract instance, a loan payoff notification to the loan process smart contract instance, (ii) unlocking, by the one or more processing devices, the collateral token, whereby the collateral token is permitted to be redeemed by the borrower or assigned to another account by the borrower, and (iii) transmitting, by the one or more processing devices, a repayment notification to the borrower and the conditional buyer indicative of the loan repayment event and the unlocking;

in response to detecting an occurrence of the loan default event, (i) transmitting, by the one or more processing devices executing the loan smart contract instance, a loan default notification to the loan process smart contract instance, (ii) unlocking, by the one or more processing devices, the collateral token and assigning the collateral token to a second user account of the conditional buyer, and (iii) transmitting, by the one or more processing devices, a sales execution notification to each of the borrower and the conditional buyer indicative of the loan default event and the assigning.

2 . The method of claim 1 , wherein the buyer is granted the collateral item by assigning the collateral token to a user account of the buyer on the distributed ledger.

3 . The method of claim 1 , wherein to secure at least a portion of the one or more loans that are secured by the collateral item includes transferring the at least a portion of the conditional sale price to an escrow account associated with the loan.

4 . The method of claim 1 , wherein initiating the pre-liquidation sale of the collateral item includes instantiating an instance of a pre-loan liquidation smart contract.

5 . The method of claim 4 , wherein the pre-loan liquidation smart contract instance locks the collateral token in the escrow account.

6 . The method of claim 4 , wherein the pre-loan liquidation smart contract instance transfers proceeds of the pre-liquidation sale to a second escrow account associated with the escrow account.

7 . The method of claim 4 , wherein the pre-loan liquidation smart contract instance records a pre-loan liquidation event record to the distributed ledger and issues a notification to the loan process smart contract instance of completion of the pre-liquidation sale including a pre-loan liquidation price of the collateral item.

8 . The method of claim 4 , wherein the pre-loan liquidation smart contract instance provides a pre-loan liquidation request to the digital marketplace, wherein the request includes at least one of the virtual representation or an indicator thereof and other documentation representative of the collateral item.

9 . The method of claim 8 , wherein the pre-loan liquidation request includes one or more of a contingent sale type, a location of the collateral item, a sought price for the collateral item, a minimum auction price for the collateral item, a length of escrow, a reward offer of one or more of a predefine reward amount, a percentage of a purchase price, a percentage of a desired loan amount, or a percentage of a repayment amount.

10 . The method of claim 4 , wherein the pre-loan liquidation smart contract instance facilitates negotiation of the set of loan terms by enabling exchange of offers and counteroffers of loan terms between the borrower and the lender via a user interface presented to the borrower.

11 . The method of claim 4 , wherein the pre-loan liquidation smart contract instance provides a contingent sale notification via a user interface to the borrower, wherein the user interface enables the borrower to select among a set of borrower actions selected from a list consisting of advancing the loan process by agreeing to the contingent sale, ending the loan process by refusing the contingent sale, and ending the loan process by completing the contingent sale.

12 . The method of claim 1 , wherein to manage the loan process in accordance with the loan process workflow includes receiving electronic payment event notifications indicating payment events by the borrower to the lender and monitoring a status of the loan based on the loan payment notifications.

13 . The method of claim 12 , wherein to manage the loan process in accordance with the loan process workflow includes executing an event listening thread that listens for the payment event notifications indicating payment events corresponding to the loan.

14 . The method of claim 1 , wherein conditionally buying the collateral item for the conditional sale price includes accepting a set of contingencies the occurrence of which result in the collateral item not being granted to the buyer.

15 . The method of claim 1 , further including the loan process workflow including providing a contingent sale notification that includes the conditional sale price to a borrower device.

16 . The method of claim 1 , wherein initiating the pre-liquidation sale of the collateral item via the digital marketplace includes providing information relating to the collateral item in the digital marketplace, wherein the information relating to the collateral item includes one or more of the virtual representation of the collateral item, collateral item authentication reports, collateral item safekeeping reports, verification that at least one of an authenticator, an appraiser, and a safekeeper have been secured to perform their respective tasks.

17 . The method of claim 1 wherein the pre-loan liquidation smart contract instance instantiates an appraisal smart contract instance that includes computer readable instructions that are configured to facilitate an appraisal task that is performed by one or more appraisers to appraise the collateral item and to issue an appraisal notification upon confirming an appraisal report indicating an appraised value determined by the one or more appraisers.

18 . The method of claim 4 wherein the pre-loan liquidation smart contract instance instantiates an authentication smart contract instance that includes computer readable instructions that are configured to manage an authentication task that is performed by one or more authenticators to authenticate the collateral item and to issue an authentication notification upon confirming receipt of an authentication report generated by the one or more authenticators.

19 . The method of claim 4 wherein the pre-loan liquidation smart contract instance instantiates a safekeeper smart contract instance that includes computer readable instructions that are configured to manage a safekeeping task of the collateral item by a safekeeper and to issue a safekeeping notification upon confirming receipt of a safekeeper report from the safekeeper of the safekeeping of the collateral item.

20 . The method of claim 1 , wherein the loan process smart contract instance is executed at by a set of node devices that store the distributed ledger.