Token-based smart contract-managed decentralized lending processes having a distributed appraisal stage
A loan process smart contract manages a collateralized loan process for a loan against a collateralized item, the collateralized loan process including tokenizing and locking a collateral token that tokenizes the collateral item, managing distributed appraisal of the collateral item, monitoring terms of the loan, and detecting an unlocking event of the loan for unlocking the collateral token.
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;
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, wherein the loan process workflow includes:
instantiating 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 receipt of an appraisal report indicating an appraised value determined by the one or more appraisers;
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 the appraised value and at least one of a description of the collateral item and one or more media contents that respectively depict at least a portion of the collateral item;
generating, by the one or more processing devices, a collateral token corresponding to the collateral item, the collateral token cryptographically linked to the virtual representation of the item, wherein the collateral token is a digital token that is stored on a distributed ledger and is redeemable for the collateral item; and
assigning the collateral token to a first user account of the borrower on the distributed ledger;
receiving a loan agreement notification indicating one or more loan term parameters of a loan agreement that was agreed to by a lender and the borrower, wherein the loan term parameters include a loan amount that 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, by the one or more processing devices, the collateral token by assigning the collateral token from the first user account to an escrow account on the distributed ledger, the collateral token remaining assigned to the escrow account 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;
monitoring, by the one or more processing devices, a repayment status of the loan in accordance with the loan term parameters to detecting an occurrence of any of the set of unlocking events;
in response to detecting an occurrence of the loan repayment event, unlocking the collateral token and assigning the token to the first user account of the borrower; and
in response to determining an occurrence of the loan default event, unlocking the collateral token and initiating a loan default workflow.
2. The method of claim 1 , wherein the loan default workflow results in the collateral token being assigned to an account of a purchaser of the collateral item.
3. The method of claim 1 , wherein the loan process smart contract instance instantiates the appraisal smart contract instance in accordance with the loan process workflow.
4. The method of claim 3 , wherein the loan process workflow is defined in a system-level governance document that is stored on the distributed ledger, wherein the system-level governance defines a condition to initiate the appraisal task.
5. The method of claim 3 , wherein the loan process smart contract instance instantiates the appraisal smart contract instance in response to receiving an authentication notification indicating that an authenticator has authenticated the collateral item and deemed the collateral item as authentic.
6. The method of claim 1 , wherein the computer-readable instructions of the loan process smart contract instance are further configured to: receive an appraisal report from an appraiser device of the appraiser, wherein the appraisal report includes a valuation of the collateral item including at least one of an appraised value of the collateral item and a liquidation value of the collateral item.
7. The method of claim 6 , wherein the appraisal report further includes one or more of a physical condition of the item, a new or used condition of the collateral item, a working condition of the collateral item, prices of previous sales of similar items, and a bluebook valuation of similar items.
8. The method of claim 6 , wherein the appraisal report further includes one or more verifications issued by one or more respective secondary appraisers, wherein each verification indicates that a respective secondary appraiser confirmed the appraised value.
9. The method of claim 6 , wherein the appraisal report is generated from a form template that is defined in accordance with an appraisal stage-level governance that defines a set of rules and regulations associated with performance of the appraisal task.
10. The method of claim 9 , wherein the appraisal stage-level governance defines an appraisal task workflow, wherein the appraisal task workflow includes one or more conditions that must be met to complete the appraisal task and trigger a next stage in the loan process workflow.
11. The method of claim 9 , wherein the appraisal stage-level governance is at least partially defined by an appraisal guild to which the appraiser is a guild member.
12. The method of claim 11 , wherein the appraisal guild includes a plurality of different specialized appraisal guilds, wherein each specialized appraisal guild specializes in appraising a respective type of collateral item.
13. The method of claim 12 , wherein the plurality of different specialized appraisal guilds includes at least a subset of the group comprising: a watch appraisal guild that specializes in appraising watches, a shoe appraisal guild that specializes in appraising shoes, a handbag appraisal guild that specializes in appraising handbags, an art appraisal guild that specializes in appraising works of art, a sports memorabilia appraisal guild that specializes in appraising sports memorabilia, a toy appraisal guild that specializes in appraising collectible toys, a jewelry appraisal guild that specializes in appraising jewelry, a clothing appraisal guild that specializes in appraising designer clothing, an instrument appraisal guild that specializes in expertise appraising musical instruments, a record appraisal guild that specializes in appraising rare or collectible records, a wine appraisal guild that specializes in expertise appraising units (e.g., barrels or bottles) of wine, a whiskey appraisal guild that specializes in appraising units (e.g., barrels or bottles) of whiskey, and an automobile appraisal guild that specializes in appraising limited edition automobiles.
14. The method of claim 12 , wherein the appraiser belongs to a specialized appraisal guild of the different specialized appraisal guilds.
15. The method of claim 14 , wherein the appraiser is assigned the appraisal task based on the specialized appraisal guild to which the appraiser belongs and an item type of the collateral item.
16. The method of claim 9 , wherein the appraisal stage-level governance defines an appraisal smart contract from which the appraisal smart contract instance was instantiated.
17. The method of claim 16 , wherein the appraisal smart contract instance initiates an escrowing of a monetary amount of currency tokens and/or tokenized tokens from an account of the appraiser to the escrow account in response to receiving the appraisal report, wherein the monetary amount of currency tokens and/or tokenized tokens is equal to or less than the appraised value.
18. The method of claim 17 , wherein at least a portion of the escrowed amount is locked in the escrow account until the loan process is complete.
19. The method of claim 6 , wherein the appraisal smart contract instance outputs the appraisal notification to the loan process smart contract in response to receiving the appraisal report from the appraiser device, wherein the appraisal notification causes the loan process smart contract instance to initiate a safekeeping stage of the loan process.
20. The method of claim 6 , wherein the appraisal smart contract instance is further configured to:
generate a data block containing the appraisal report and a cryptographic hash value that is generated based at least in part on the appraisal report; and
write the data block to the distributed ledger.
21. The method of claim 1 , wherein a rating of the appraiser is updated based on an outcome associated with the appraisal task.
22. 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.