How It Works

How the protocol works

The protocol works by extending credit lines to lending businesses on NURVIA App. These businesses use their credit lines to draw down stablecoins from the pool, and then they exchange it for fiat and deploy it on the ground in their local markets. In this way, the protocol provides the utility of crypto — specifically, its global access to capital — while leaving the actual loan origination and servicing to the businesses best equipped to handle it.

On the investor side, crypto holders can deposit into the pool to earn yield. As the lending businesses make their interest payments back to the protocol, they’re immediately disbursed to all investors.

A Risk Tokenized Loan is a structured financial product designed to do the following:

1. Enable SMEs and reputable lending businesses to ask for a loan by issuing a Risk Tokenized Loan accessible to retail

2. Deploy money collected from lenders/investors and Risk Tokenized Loan purchasers to generate interest on principal in overcollateralized DeFi/CeFi margin lending markets

3. Swap interest for Risk Tokenized Loan: the interest generated by the loan is given as funding to SMEs and reputable lending businesses, while the retail purchasers of the loan earn tokens

4. At loan maturity, loan underwriters and RTL buyers are returned their principal plus interests

While the loans may generate just 8% to 15% in interest, which as mentioned above is nothing special, the Risk Tokenized Loan they are swapped for could 100x or even 1,000x.

With the loan, retail only captures 15% of the growth in the swapped Risk Tokenized Loan. So, a 100x translates to 1,000% nor 10,000%. Even then, 1,000% is far, far more exciting than 15%, yet it does not risk principal funds.

Of course, the swapped Risk Tokenized Loan may go to 0, which is the key reason retail has been aversive to lending to begin with. However, with the Risk Tokenized Loan, the principal was never exposed to loans. So even if a swapped loan reaches -100%, the net return in fact leads is a 1x return, essentially no change in portfolio.

Risk Tokenized Loan Exchange

The Risk Tokenized Loan is an asset class native to the NEPRI platform. It will need liquidity, and the platform will also facilitate that. To clarify, a Risk Tokenized Loan, like any loan, locks funds and returns them after a maturity date (like an expiry date). Only at the maturity date, the funds are unlocked from the Risk Tokenized Loan. It’s likely that some (or many) people may want to exit their position before a Risk Tokenized Loan’s expiry date. The Risk Tokenized Loan Exchange facilitates this demand. There will be trading fees. The RTL Exchange will be open to all for trading loans of tokens.

This is how the chess pieces come together:

• Personal finance is growing rapidly

• Retail is becoming actively involved in personal portfolio management

• CeFi and DeFi provide stable return on principal, for lenders

• The possible upside of lending to SMEs is incredibly exciting

• RTLs (Risk Tokenized Loans) largely remove the risk factor in venture funding

RTL as a product has incredible potential, and they are qualified to target reputable lending businesses and SMEs, RTL as a product will provide them with compliant funding, sourced from retail. The structured state of RTLs will ensure reputable lending businesses and SMEs can confidently receive the funding that has been committed to them. Simultaneously, it ensures to retail the delivery of their swapped tokens, without reputable lending businesses and SMEs themselves acquiring the principal funds. Fiat on-ramps to the platform must be built powered by the NEPRI Clearer, A community deployed DApp which provides a borderless, peer-to-peer, fiat-to-crypto ‘Clearer Network' that allows Stakeholders to find nearby users to exchange their cash for nYUSD and currency. nYUSD is required to become a seller in the network.