System Components
Last updated
Last updated
Definder system facilitates an innovative ecosystem for investors and real estate developers by blending liquidity pools, a Decentralized Autonomous Organization (DAO), and smart contract functionality. This section delves into the intricate workings of the Definder system, illustrating its functionality, components, and the seamless interaction between different parts of the system.
The emergence of blockchain technology has paved the way for novel financial instruments and platforms, among which Definder stands out for its focus on real estate investment. By offering a decentralized platform, Definder aims to democratize access to real estate financing and investment, reducing barriers to entry and enhancing transparency and security for all parties involved.
1. Decentralized Autonomous Organization (DAO)
The DAO is central to governance within Definder, allowing token holders to vote on crucial platform decisions, including project approvals and governance rule changes. This model ensures transparency and community-driven decision-making.
2. Smart Contracts
Smart contracts automate the execution of transactions and agreements, including fund distribution and interest payments, enhancing security and efficiency within the Definder ecosystem.
3. Definder Marketplace
The Definder Marketplace is where approved real estate projects are listed. It acts as a bridge between investors looking for opportunities and developers seeking financing, showcasing projects that have passed the DAO's scrutiny.
4. Definder Token (DFIND)
DFIND is the native token of the Definder platform, used for voting on DAO proposals, receiving bonuses, and making payments within the system. It's a pivotal element that facilitates community engagement and rewards within the ecosystem.
5. Payment Processing Partners
To ensure seamless transactions, Definder collaborates with payment processing partners. These partners assist in the off-ramp of digital assets, enabling users to convert their digital holdings into traditional currencies effortlessly.
6. Centralized Exchange (CEX) - Whitebit
Whitebit serves as a centralized platform where users can purchase DFIND tokens. It provides a secure and user-friendly environment for those preferring traditional exchange models.
7. Decentralized Exchange (DEX) - PancakeSwap
For users inclined towards decentralized trading, PancakeSwap offers a platform to buy DFIND tokens in a decentralized manner. It supports the ethos of Definder by providing an option for trustless, peer-to-peer transactions.
The first step in the Definder system involves developers submitting their projects to Definder team for review. This process requires business to provide comprehensive information about their projects, including plans, financial projections, and risk assessments, to facilitate thorough due diligence. Once a project is submitted, the Definder Decentralized Autonomous Organization (DAO) plays a crucial role in the review process.
Token holders within the DAO are empowered to vote on whether a project should be approved for financing. This democratic approach ensures that only projects meeting the community’s standards and expectations receive funding, aligning project selection with investor interests and platform integrity.
Upon receiving approval from the DAO, projects are listed on the Marketplace. All the projects on the Marketplace are open for financing. Each of them has a representative Lending Smart Contract live and open for investing. Smart contracts duplicate the Lending terms have a representative smart contract in the back end. Smart Contracts include all the terms of the loan and dictate the Lending Between the User and the Project.
Smart contract includes: -Minimum Raise Amount: the minimum amount that could be raise for the round of financing for the project. -Maximum Raise Amount: the total amount that the project could use for the current needs (the minimum and the maximum could be the same). -Total Amount to Be Returned: This field represents the total amount that the project will have to return by the end of the loan repayment (loan + interest). -Start of Funding: Beginning date of when the contract will be open for accepting financing. -End of Funding: End date of when the contract will no longer accept financing. -Interval Payments Amount: The amount that the project will have to pay on monthly basis. -Interval Payment time frame : Which time frame would require the project to pay the "interval amounts"(monthly, weekly, quarterly). -Number of Periods: How many periods is the project required to pay the "interval amounts". -Possibility of Early Repayment: The time frame for when the project has an option to repay the "Total Amount to be Returned" (if the project has this option it would be presented in the project details) -Platform Rate: The commission of the platform that would be charged on the returns that User makes from the project returns 4%. -3 different wallets for the Multi-signature withdrawals: The protection mechanism. Each smart contract has wallets that are recorded upon deployment are to be called up on to confirm any withdrawals of funds from the smart contract. These wallets include one wallet from the Project side, One wallet from the Definder side, one wallet from an independent third party or an accountant. -Return function: smart contract has an option to return all the funds without closing the contract. The function is to return the funds to the wallets that have invested into the Smart contract. The funds cannot be sent to any other wallet then the one that was used for the investment and can only be returned in the same currency. The function doesn't allow for selected investors to receive the funds back.
Following the vote and deployment of the smart contract the Project is listed on the "Marketplace" where will be open for financing. The project cards represent each individual project that is available. The project card shows the status of the project (financing, Voting, Rejected, Completed), Period of the loan, and the ROI (Return On Investment), and investments raised for the project. Each is opened for a limited time - meaning from the moment that the round is open there is a timer that is shown this is normally within 1-3 months rage. This is a period of raising the funds. If after this period the "Minimum Raise Amount" is not reached the project will either: 1. Be receive an financing extension of an additional period of 1-3 months. 2. Be relisted on the DAO to vote whether to refund the current investments and close the project. 3. Be relisted on the DAO to vote on Relisting the project back to the marketplace for an extension keeping the current funds. 4. Be relisted on the DAO to vote on Relisting the project but refunding the project on the Marketplace with the amount that has been raised refunded back to the initial investors.
When the project is financed completely the funds are available for the Project to withdraw. Through a Multi-signature authorisation.
To withdraw the funds from the "Lending Smart Contract" any party has to receive authorisation from each of the multi-signature wallets. These wallets include one wallet from the Project side, One wallet from the Definder side, one wallet from an independent third party or an accountant. This is realised at the Administrative Panel.
One of the wallets can initiate an withdrawal from the lending contract. The request could be for the whole sum or for a portion. In order for the quest to be accepted the asking party has to present the documentation that would support what the funds are going to be used for. Following the review the all three parties have to green-light the withdrawal before any more is sent out of the contract. As soon as any funds are withdrawn the Repayment Period timer commences. When the funds are withdrawn the the first "Interval Payments Amount" would be due at the end of the first "Interval Payment time frame" from the moment of the first withdrawal.
A critical component of the Definder ecosystem is the mechanism for interest repayment. Projects are obligated to make periodic "Interval Amount Payments" to investors or share a portion of the project’s revenue, as dictated by the "Lending Smart Contract". The funds are to be paid by the Project directly back into the Smart contract. Once the funds are transferred to the Smart Contract. As soon as the funds enter the Smart Contract they are distributed amongst the investors proportionally. These are executed by the smart contract and happen in real time directly to the investor wallet from where the investment has been made..
Projects might have an option to repay the loan amount earlier then the end of contract date. If this to happen the project must repay the "Total Amount to Be Returned". This includes the laon principle + interest rate. If the project is borrowing 100'000 USDT, at a 10% interest rate, 12 months period, with monthly payments, 6 months possible early repayment. The project has an option to repay the full sum at an earlier date - meaning that any time following a 6 month period the Project has a right to repay the full 110'000 USDT to the contract to close the debt early. This is proposed to allow projects more flexibility with refinancing and earlier gain options for the investors.
In case the project misses payment for one reason or another there are number of mechanisms that are in place to protect the investors. Any missed payments are to be presented and explained to the investors. The project has a right to a payment delay within within a 5-Business day time frame with to actions from the enforcement parties. Alternatively, the following are to be used to protect interest of the investors: 1. Deposit - When the project lacks relevant credibility it is asked to provide a deposit equivalent to 2 months of Interval Payments to a mutually agreed the custodial wallet. These funds are to be used in case of the missed payments. 2. The Withdrawals limits - if the project does not present the invoices and the relevant paperwork for the funding withdrawal the funds remaining on the contract could be used to repay the interest payment on behalf of the project which the project then has to cover. 3. Collateral - the collateral is presented and listed on the project card. The collateral is to be used in case there are 3 consecutive missed Interval Payments. The collateral will be taken into custody by the Custodial agent and sold to provide returns back to the investors following the sale.
