Pine Paper V2
  • Introduction
    • 🏕️Overview
    • 🤓Protocol Highlights
    • 📽️Feature Highlights
    • 🛣️Roadmap
  • 🌲Pine Protocol
    • Overview
    • Loan Structure
    • Loan Parameters
    • Loan Lifecycle
    • NFT Valuation
    • Protocol Fee
    • Compliance
    • Team
  • 🪄Pine Features
    • Pine Now Pay Later (PNPL)
    • Bid Now Pay Later
    • Bulk Borrowing
    • Pine Listing
  • 🔐Risk & Security
    • Credit Risk
    • Smart Contract Audit
  • 🌌Ecosystem
    • Overview
    • Pine Token
    • PineDAO
    • Age 1
    • Age 2
    • Age 3
  • 📚PINE GUIDES
    • Guides Overview
    • Borrowing
    • Lending (NFTs)
    • Lending (SFTs)
    • Pine Now Pay Later
    • Staking & Burning
    • Governance Voting
  • 🧙‍♂️FAQs
    • General
    • Borrowing
    • Lending
    • SFTs
    • Pine Now Pay Later
    • $PINE (Governance)
    • Troubleshoot
    • Resources
  • 💼We're hiring!
    • Open Positions
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  • i. Asset-Backed Loan
  • ii. Segregated Pool
  • iii. Term Loan
  1. Introduction

Protocol Highlights

Elements that make our protocol stand out

i. Asset-Backed Loan

The main product of the protocol is to serve as a facilitating platform for Asset Back Loan borrowing and underwriting. Users will be able to pledge NFTs as collateral to meet their liquidity requirements while on the other hand to extract extra yield from their idle cryptocurrency cash.

ii. Segregated Pool

Every lender sets up their own segregated lending pool on the Pine protocol instead of participating in commingled lending pools alongside with multiple depositors. This gives each lender flexibility to choose the types of collateral they would like to lend against and set their own terms. When a loan position defaults, the ownership of the collateral is transferred to the lender. There is no need for forced selling of the collateral as every loan and the underlying collateral is mapped to only one lender. Finally, lenders face less compliance and regulatory risk with the segregated pool structure as compared to a public lending pool where funds from multiple depositors are commingled.

Segregated Pool
Commingled Pool

Risk Assessment

Accurate

Blurry

Control of Exposure

Lender

Protocol

Ownership of Collateral

Defined

Vague

Risk of Bank Run

Not at risk

At Risk

iii. Term Loan

All loans are structured as term loans on the Pine Protocol. This means that all loans on Pine have a fixed duration, e.g. 7 days. Lenders can offer multiple loan durations when setting up a lending pool for a specific NFT collection. Furthermore, lenders can also set different terms, i.e. LTV and interest rates, for different loan durations in order to manage the associated risk. The term loan structure makes it a lot easier for borrowers to manage their loan positions as everything, such as repayment date, total interest payable, etc are known and agreed upon on the onset when the loan is initiated. Under normal circumstances, borrowers face no liquidation risk as long as they repay or extend the loans before the end of the loan term.

Term Loans
Continuous Loans

Terms of Loan (e.g. interest payable)

Fixed at the start of term

Changes constantly

Interest Rate

Fixed

Volatile

Cash Flows

Predictable

Unpredictable

Market-to-market Liquidation

No

Yes

Risk of Protocol Insolvency

Low

High

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Last updated 1 year ago

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