In the case of real asset-backed bonds, once the maturity date passes and insolvent liquidation occurs, ABTokens are purchased through the NPL Management Ltd Open Market. The Open Market is a smart contract that exists in a different layer from the Money Pool. Through the Open Market, ABTokens equivalent to insolvent bonds are sold. According to the liquidation process, the ABToken sales generated in the Open Market are automatically transferred to the Money Pool Contract, through which the loan generated from the Money Pool is repaid.
In order to participate in the NPL Management Ltd Open Market and proceed with the liquidation process, the following conditions must be satisfied:
- A license for the transfer of non-performing debts (NPLs) and buying and selling of collateral in the area in which the collateral is located.
- The Governance of ELYFI must certify the license in advance and register the license holder as a participant.
- To ensure ecosystem development and stability, a certain number of governance tokens must be secured.
Insolvent ABTokens registered on the sales list can be traded through exchange with cryptoassets. All basic information for the ABTokens is transparently disclosed in the token contract. The minimum selling price is equal to reimbursement loss, and in general, the sale is conducted by auctioning.
Depending on the presence or absence of a pre-purchase contract for ABTokens, selling methods may vary. NPL buyers participating in ELYFI can apply for a pre-sale contract at the time of ABToken generation. In the case of a pre-purchase contract, a NPL buyer can purchase ABTokens by preferential purchase right before they are sold to another party at 10-20% of the value of the tokens. When the liquidation of ABTokens is in process if they are registered in the Open Market, the person signing the pre-purchase contract has a preferential purchase right. NPL buyers can benefit from the pre-purchase contract because they can purchase ABTokens with cryptoassets at low cost and then resell them at a profit.
NPL buyers who participate in the Open Market and engage in transactions perform the roles of liquidating collateral such as real assets held for loans, recovering cryptoassets equivalent to the principal amount, and improving the Money Pool liquidity.