Lending Process and Collateralization

The P2P lending process in the Mey Network is designed to be straightforward and accessible to a broad range of users. Here’s how it works:

1. Verification and Valuation by Meey Finance

Before a property can be tokenized into an NFT, Meey Finance, a member of Meey Group, plays a crucial role in verifying the legitimacy of the real estate and estimating its value.

Meey Finance issues a certificate that confirms the property’s authenticity and appraised value, ensuring that only legitimate and accurately valued properties are brought onto the platform.

1. Custodial Role of Meey Finance

Meey Finance acts as a custodial party that holds the real estate under a contract for the duration of the loan. The property remains under the custody of Meey Finance until the borrower repays the borrowed amount plus the agreed-upon APY (Annual Percentage Yield).

This custodial arrangement ensures that the property is securely managed and protected throughout the loan term.

1. Listing of NFTs

Once the real estate has been verified, valued, and secured under a custodial contract by Meey Finance, the owner can tokenize it into NFTs and list these on the MeyFi platform.

Each listing includes details about the property, the number of NFTs issued, and the terms of the loan.

1. Loan Request Submission

After listing, the property owner submits a loan request, specifying the amount they wish to borrow, the interest rate, and the loan duration.

The NFTs representing the property are then locked in a smart contract, serving as collateral for the loan.

1. Lender Participation

Lenders browse the available loan requests and choose the ones that match their investment criteria. By providing funds to the borrower, lenders earn interest on the loan over the agreed-upon term.

1. Smart Contract Execution

The entire lending process is governed by smart contracts, which automate the loan agreement, collateral management, and repayment process.

If the borrower fails to repay the loan according to the terms, the collateralized NFTs are automatically transferred to the lender, ensuring that lenders are protected from default.

1. Real Estate Liquidation

If the borrower is unable to repay the loan, Meey Finance will step in to manage the sale of the underlying real estate.

The property, held under the custodial agreement, will be sold by Meey Finance, and the proceeds from the sale will be used to repay the borrowed funds along with the APY to the lenders.

Any remaining funds after covering the loan amount and associated costs are returned to the borrower.

1. Repayment and Yield

Borrowers repay the loan with interest over the term, and upon successful repayment, the collateralized NFTs are released back to the borrower.

Lenders receive their principal along with the accrued interest, providing them with a steady income stream.