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Collateralization in general and Pledging, in particular, are powerful tools to be added to the FinP2P network toolbox and we envision this tool will evolve to represent broader and more complex use cases on the FinP2P network.

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Collateral Managers

To facilitate and orchestrate the collateral pledging process and various use cases around it, we are adding a provider type to the network - the Collateral manager. A collateral manager exposes to the finp2p network a set of pledge plans that are supported by the collateral manager and allows assets and users' primary nodes to interact to execute pledge plans. A collateral manager responsibilities include:

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• Asset’s Primary Node

• Pledgor (Borrower) and his FinP2P Node

• Pledgee (Creditor) and her FinP2P Node

• Collateral Manager

Flow break down

1. Using the Intent Management API the Asset’s primary node publishes to the network information regarding its Asset, sharing the Asset with a Collateral Manager indicate that the Asset may be used as a collateral.

2. Given Asset information by a Primary Node, the Collateral Manager may create a Pledge Plan resource and share the it with other nodes on the network.

3. Pledgee creates an Intent to provide a loan for the Asset in exchange for another Asset for a specific interest rate, the intent creation is routed from the Pledgee Primary Node to the Collateral Manager.

4. Collateral Manager may enforce some validation and checks intent created and the proposed Pledgee, if the Pledgee information and certification is not known to the Collateral Manager they may use the Get resource information APIto fetch the information.

5. Pledgor interested in the Loan offer may execute the intent,The Collateral Manager will start processing of the intent.in case of successful operation, the Pledgor will receive the agreed Asset amount while the Pledgee will receive an NFT which represent her ownership and role in the Loan.

6. Loan may end in a Release, where the Loan is payed fully be the Pledgor, or Default when Pledgor fails to fulfill the Loan conditions.

   1. Release - the Pledgor executes a Pay API call to the Collateral Manager, including signed Payment instruction towards the Loan beneficiary, note that if the Loan NFT is transferable, the Pledgor will need to get the beneficiary payment information from the Collateral Manager prior to the payment.

   2. Default - in case the Collateral Manager deems the Loan as defaulted they may forfeiture the pledged Asset by releasing it to the NFT loan beneficiary

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