Smart contract-managed decentralized lending processes using collateral tokens

Abstract

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, executing a loan process workflow that includes a series of loan process workflow stages that are defined in a set of system-level governance documents, monitoring terms of the loan, and detecting an unlocking event of the loan for unlocking the collateral token.

What is claimed is: 
     
         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 that includes a series of loan process workflow stages that are defined in a set of system-level governance documents, wherein to execute the loan process workflow includes:
 instantiating one or more of an appraisal smart contract instance to manage an appraisal stage according to an appraisal stage-level governance document, an authentication smart contract instance to manage an authentication stage according to an authentication stage-level governance document, and a safekeeper smart contract instance to manage a safekeeping stage according to a safekeeper stage-level governance document; 
 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 an 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; and 
 
 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 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; and 
 
   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 is 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 detect an occurrence of the unlocking event;   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 detecting 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 appraisal smart contract instance 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. 
     
     
         3 . The method of  claim 1 , wherein the authentication smart contract instance 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. 
     
     
         4 . The method of  claim 1 , wherein the safekeeper smart contract instance 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; 
     
     
         5 . The method of  claim 1 , wherein the set of system-level governance documents define an order of performance of the loan process workflows stages. 
     
     
         6 . The method of  claim 1 , wherein the set of system-level governance documents define allowed types of collateral items. 
     
     
         7 . The method of  claim 1 , wherein the set of system-level governance documents define rules for guild formation and membership. 
     
     
         8 . The method of  claim 1 , wherein the set of system-level governance documents define rules for managing a loan process workflow between stages. 
     
     
         9 . The method of  claim 1 , wherein the set of system-level governance documents define rules that require escrow of currency in relation to a task of a respective stage in which the task is performed. 
     
     
         10 . The method of  claim 1 , wherein the set of system-level governance documents define rules for performing tasks. 
     
     
         11 . The method of  claim 1 , wherein the set of system-level governance documents define rules for changing the set of governance documents. 
     
     
         12 . The method of  claim 1 , wherein the set of system-level governance documents define rules for rewarding stage participants. 
     
     
         13 . The method of  claim 1 , wherein the set of system-level governance documents reference one or more respective loan process smart contracts that are stored on the distributed ledger. 
     
     
         14 . The method of  claim 13 , wherein the one or more respective loan process smart contracts enforce one or more aspects of the system-level governance documents. 
     
     
         15 . The method of  claim 14 , wherein the one or more aspects of the system-level governance documents enforced by the one or more respective loan process smart contracts includes, initiating a next stage of the loan process workflow based on completion of a current stage. 
     
     
         16 . The method of  claim 1 , wherein the loan process smart contract instance includes conditional logic that enforces an order of performing the series of loan process workflow stages that are defined in the set of system-level governance documents. 
     
     
         17 . The method of  claim 1 , wherein the appraisal stage-level governance document is subordinate to the system-level governance documents. 
     
     
         18 . The method of  claim 1 , wherein the authentication stage-level governance document is subordinate to the system-level governance documents. 
     
     
         19 . The method of  claim 1 , wherein the safekeeping stage-level governance document is subordinate to the system-level governance documents. 
     
     
         20 . The method of  claim 1 , wherein the loan smart contract instance is executed at least in part by a set of node devices that store the distributed ledger.