Trusset Protocol - Infrastructure for Asset Tokenization

Asset Financing transforms tokenized securities into structured loans where sellers become lenders. Buyers make down payments and monthly installments while tokens remain in smart contract escrow until full payment completion.

Why Enable Financing

Expand Buyer Pool

Enable purchases from buyers who lack full capital but meet creditworthiness requirements

Earn Interest

Generate returns from interest payments while maintaining collateral security

Automated Collection

Smart contracts handle monthly payments without manual invoicing or tracking

Default Protection

Keep down payment plus penalties if buyer defaults, with automatic token return

Mortgage Infrastructure

The financing system operates through decentralized mortgage contracts that handle escrow, payment processing, interest calculation, and default resolution without intermediaries. Tokens lock in escrow during the payment period. Buyers gain beneficial ownership rights (dividends, governance if applicable) but cannot transfer or sell until final payment completes. This structure protects sellers while enabling buyer participation in asset performance.

Down Payment Structure

Down payment percentage inversely correlates with interest rates and maximum loan duration. Lower down payments increase seller risk, reflected in higher interest charges.

Down Payment	Interest Rate	Max Duration	Use Case
25-40%	12-15% APR	5 years	Aggressive financing for high-confidence buyers
40-60%	8-12% APR	10 years	Balanced approach for standard credit profiles
60-80%	4-8% APR	30 years	Conservative financing minimizing seller risk

Sellers configure acceptable down payment ranges when enabling financing on listings. Buyers select their preferred down payment within allowed bounds during purchase, with contract calculating interest rates automatically.

Interest Rate Calculation

The mortgage manager calculates rates using tiered formulas based on down payment percentage:

function calculateInterestRate(downPaymentBps: number): number {
    // downPaymentBps in basis points (4000 = 40%)
    
    if (downPaymentBps < 4000) {
        // 25-40% down: 12-15% APR
        const range = 4000 - 2500; // 1500 bps range
        const position = downPaymentBps - 2500;
        return 1500 - ((position * 300) / range); // 15% to 12%
    } else if (downPaymentBps < 6000) {
        // 40-60% down: 8-12% APR
        const range = 6000 - 4000; // 2000 bps range
        const position = downPaymentBps - 4000;
        return 1200 - ((position * 400) / range); // 12% to 8%
    } else {
        // 60-80% down: 4-8% APR
        const range = 8000 - 6000; // 2000 bps range
        const position = downPaymentBps - 6000;
        return 800 - ((position * 400) / range); // 8% to 4%
    }
}

This algorithm ensures smooth rate transitions across tiers while incentivizing higher down payments through better terms.

Payment Processing

Monthly payments process automatically through smart contract execution. Buyers authorize recurring payments or manually trigger monthly installments before due dates.

// POST https://api.trusset.org/v1/trading/financing/purchase

const response = await fetch('https://api.trusset.org/v1/trading/financing/purchase', {
  method: 'POST',
  headers: {
    'Authorization': `Bearer ${API_KEY}`,
    'Content-Type': 'application/json'
  },
  body: JSON.stringify({
    listingId: "listing_abc123",
    downPaymentBps: 5000, // 50%
    durationMonths: 36, // 3 years
    paymentToken: "0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48",
    enableAutoPayment: true // Authorize automatic monthly deductions
  })
});

const { mortgageId, monthlyPayment, totalInterest } = await response.json();

Automated payments require initial token approval allowing the mortgage contract to deduct monthly amounts. Manual payments offer flexibility for irregular income or early payoff strategies.

Mortgage Lifecycle

Purchase Initiation

Buyer selects down payment percentage and loan duration within seller’s parameters. Smart contract calculates monthly payment based on interest rate formula.

Down Payment & Escrow

Buyer transfers down payment to seller immediately. Token locks in mortgage escrow contract until full payment completion.

Monthly Payments

Buyer makes scheduled monthly payments containing principal and interest. Contract tracks remaining balance and payment history on-chain.

Completion

Final payment triggers automatic token transfer from escrow to buyer. Mortgage marked complete, seller receives final installment.

Early Payoff (Optional)

Buyer can pay remaining balance anytime without prepayment penalties. Token releases immediately upon full payment.

Default Handling

Missed payments trigger grace periods before default declaration. Sellers receive multiple protections ensuring capital recovery even in default scenarios.

Grace Period
Default Declaration
Credit Impact

Buyers get 15-day grace periods after payment due dates. Late fees accrue during grace periods (typically 5% of payment amount) but default doesn’t trigger until grace expires.

// Payment due: Day 1
// Grace period: Days 1-15
// Late fee: 5% of monthly payment
// Default trigger: Day 16 if unpaid

After grace period expiration without payment, contract automatically declares default. Token returns to seller from escrow, buyer loses all paid amounts including down payment.

// POST https://api.trusset.org/v1/trading/financing/default

await fetch('https://api.trusset.org/v1/trading/financing/default', {
  method: 'POST',
  body: JSON.stringify({
    mortgageId: "mortgage_xyz789"
  })
});

// Results:
// - Token returns to seller
// - Seller keeps: down payment + all past payments + 2.5% penalty
// - Buyer receives: nothing
// - Credit mark recorded on-chain

Defaults record permanently on-chain, creating decentralized credit histories. Future sellers can query buyer default history before approving financing terms.

// GET https://api.trusset.org/v1/trading/financing/credit/{address}

const creditHistory = await fetch(
  `https://api.trusset.org/v1/trading/financing/credit/${buyerAddress}`,
  { headers: { 'Authorization': `Bearer ${API_KEY}` } }
).then(r => r.json());

// Returns:
// - totalMortgages: number
// - completedOnTime: number
// - defaults: number
// - averageDownPayment: number
// - creditScore: calculated 0-1000

Defaults are irreversible once declared. Buyers lose all paid amounts including down payment with no refund mechanism. This strict enforcement ensures seller protection and discourages strategic defaults.

Seller Protections

Multiple mechanisms protect sellers from buyer default risk while enabling financing options that expand potential buyer pools. Immediate Down Payment: Sellers receive 25-80% of asset value upfront, reducing exposure to only the financed portion. Collateral Security: Tokens remain in escrow throughout payment period—sellers maintain legal ownership until final payment. Default Penalties: On default, sellers keep all received payments plus 2.5% penalty fee calculated on remaining balance. Credit Verification: Query on-chain credit histories before approving financing to assess buyer reliability. Early Payoff Benefits: Buyers can pay early without penalties, reducing seller’s capital lockup period.

Payment Tracking

All mortgage activity records on-chain with complete payment histories, remaining balances, and interest calculations.

totalLoanAmount

uint256

Original financed amount excluding down payment

monthlyPayment

uint256

Fixed monthly payment amount including principal and interest

remainingBalance

uint256

Current outstanding principal after applied payments

paymentsMade

uint256

Count of successful monthly payments

paymentsRemaining

uint256

Number of payments until loan completion

totalInterestPaid

uint256

Cumulative interest paid to date

nextPaymentDue

uint256

Timestamp of next payment deadline

Export payment data for tax reporting, accounting integration, or buyer dashboards through API queries or direct blockchain reads.

Configuration Options

Sellers customize financing terms per listing, controlling risk exposure and return expectations.

minDownPayment

uint256

Minimum acceptable down payment in basis points (2500 = 25%)

maxDownPayment

uint256

Maximum down payment before requiring instant purchase (8000 = 80%)

maxDuration

uint256

Longest acceptable loan term in months (60 = 5 years)

enableAutoPayment

bool

Whether to require or allow automatic monthly deductions

creditScoreMinimum

uint256

Minimum on-chain credit score for financing eligibility (optional)

Tighter restrictions reduce default risk but limit buyer access. More flexible terms expand the market but increase exposure to payment failures.

Getting Started

​Why Enable Financing

Expand Buyer Pool

Earn Interest

Automated Collection

Default Protection

​Mortgage Infrastructure

​Down Payment Structure

​Payment Processing

​Mortgage Lifecycle

​Default Handling

​Seller Protections

​Payment Tracking

​Configuration Options

Why Enable Financing

Mortgage Infrastructure

Down Payment Structure

Payment Processing

Mortgage Lifecycle

Default Handling

Seller Protections

Payment Tracking

Configuration Options