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2021-04-27 Collateral Management Enhancements at the Portfolio Level

Loan Collateral Management Updates

We've launched 2 new features today relating to loan collateral management:

  • Collateral Release Configuration: Users now have the ability to dictate whether or not a Loan Portfolio will automatically trigger a release of collateral in the event of a Collateral Release Percentage breach.
  • Manual Update of Collateral Quantity at the Portfolio Level: Users can now manually change the amount of collateral held by the lender within a portfolio.

How they Work

Collateral Release Configuration

  • On the Loan Portfolio page (portal.zerohash.com → Loans → Loan Portfolios), go to Edit and a pop-up will appear:

Screen_Shot_2021-04-27_at_5.00.48_PM.png

  • There is a new configuration called "Ignore Collateral Releases?"
  • Here are the meanings of each configuration option:
    • Yes: The system will never automatically trigger a collateral release.
    • No: The system will always trigger a collateral release if conditions are met.
  • Click OK to save your configurations; the saved setting is active instantly.

Manual Release of Collateral at the portfolio level

  • Prior to this release, users could only manually change the collateral quantity held by the lender at the loan level, by altering the Collateral Quantity in the highlighted text box (portal.zerohash.com → Loans → click on Loan ID URL → Edit Loan Terms):

Screen_Shot_2021-04-27_at_5.07.14_PM.png

 

  • Now, users can perform a similar action at the portfolio level, by altering the Collateral Quantity in the highlighted text box (portal.zerohash.com → Loan Portfolio → click on Loan Portfolio ID URL → Edit):

Screen_Shot_2021-04-27_at_5.11.13_PM.png

  • Once that number is changed to ie, 1,705, 10 ETH will be sent from the lender to the borrower.
  • These 10 ETH will be dispersed on a Pro-Rata Basis amongst all the loans within the portfolio.

 

Pro-Rata means that loans are weighted differently based on the current loan value. So using a more simplified example, if you had 2 loans:

Loan Current Loan Value Pro-Rata Value (or "weight")
1 $100 (100 / 250) 40%
2 $150 (150 / 250) 60%
Total $250 100%

 

And the user made a change in collateral that was (-10) ETH compared to its previous value, (4) ETH would be taken from Loan 1 and moved to the borrower and (6) ETH would be taken from Loan 2.