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2020-10-30 Self-Service Loan Editing

Feature Overview

Zero Hash recognizes that loan characteristics may change throughout a loan's lifetime. Therefore,  Zero Hash has enabled platforms administering loans on Zero Hash to modify key attributes of active loans via the portal. After editing a loan's characteristics, the changes will come into effect instantly. For example, if you change the loan quantity from 25 to 30 BTC, 5 BTC will instantly be transferred from lender to borrower, given the lender has sufficient assets at Zero Hash. More examples below.

These are the currently supported editable attributes:

  • Open Term (Y/N): A flag for whether the loan is open, i.e. there is no maturity date, or not
  • Maturity Date: The specific date and time when the loan will mature
  • Loan Quantity: The amount of asset lent from lender to borrower
  • Collateral Quantity: The amount of collateral provided from borrower to lender
  • Collateral Requirement Percentage: The amount of collateral that must be posted from borrower to lender, as a percentage of the current value of the Loan Quantity
  • Collateral Top Up Percentage: The ratio of current collateral value to current loan value, below which, the borrower must top up to the Collateral Requirement Percentage level
  • Collateral Release Percentage: The ratio of current collateral value to current loan value, above which, the lender must release funds to re-balance to the Collateral Requirement Percentage level

Portal Updates

Where to find the "Edit Loan Terms" button

 

General Guidelines when Editing

  • All current values will auto-populate, you can then edit from there:mceclip0.png
  • Zero Hash will only recognize and persist changed values. So if you just want the Loan Quantity altered, just change that value and hit OK.
  • You will not be able to choose a Maturity Time in the past
  • If you enable Open Term, Zero Hash will clear out the previously saved Maturity

Example Flows

Example Participants

  • Lending Platform Operator (188IMJ)
  • Lending Counterparty (8VX5KD)

Example Loan

  • Lender: Lending Platform Operator (188IMJ)
  • Borrower: Lending Counterparty (8VX5KD)
  • Loan Asset: USDC
  • Loan Quantity: 10,000,000
  • Collateral Asset: BTC
  • Collateral Quantity: 966.28089880
  • Collateral Requirement Percentage (%): 130
  • Collateral Release Percentage (%): 135
  • Collateral Top Up Percentage (%): 125

Making a Loan Open Term

  • In this case, we wish to make it an open term loan, so we toggle the Open Term configuration option to Yes, which results in the Maturity Time becoming uneditable on the GUI as the loan will not have a Maturity Time:Screen_Shot_2020-10-29_at_7.49.01_PM.png
  • Click OK, and the Maturity Timestamp will be updated:Screen_Shot_2020-10-29_at_7.52.34_PM.png

Editing the Maturity Date

  • In this example, we wish to reduce the Maturity Time by 1 week from 2020-11-27-19:24:00 to 2020-11-20 19:24:00
  • Use the date picker to point and click. You can also manually edit the date and/or time via the text box:Screen_Shot_2020-10-29_at_7.37.13_PM.png
  • Click OK, and the Maturity Timestamp will be updated:Screen_Shot_2020-10-29_at_7.45.12_PM.png

Editing Loan Quantity

  • Increasing the Loan Quantity will result in a movement of the Loan Asset from the Lender to the Borrower
  • Decreasing the Loan Quantity will result in a movement of the Loan Asset from the Borrower to the Lender
  • In this example, we are going to increase the Loan Quantity is increasing by 500,000. 10,000,000 to 10,500,000. But before that, notice
    • Loan Quantity = 10,000,000
    • Initial Loan Value (USD) = 10,009,021.84
    • Current Loan Value (USD) = 9,998,003.97
    • Current Collateral Coverage (%) = 129.93
    Screen_Shot_2020-10-29_at_8.13.02_PM.png
  • Now we make the edit and click OK
    mceclip6.png
  • Now, see how the values have changed:
    • Loan Quantity = 10,000,000 → 10,500,000
    • Initial Loan Value (USD) = 10,009,021.84 stays the same
    • Current Loan Value (USD) = 9,998,003.97 → 10,497,974.4
    • Current Collateral Coverage (%) = 129.93 → 124.86 (Reminder that this calculation is [Current Collateral Value (USD) / Current Loan Value (USD)])
    Screen_Shot_2020-10-29_at_8.34.39_PM.png
  • Also, 500,000 USDC has been moved from the Lender, Lending Platform Operator (188IMJ), to the Borrower, Lending Counterparty (8VX5KD). This can be viewed on the Participants → Balances → USDC Available URL from the Lending Platform Operator (188IMJ)'s perspective:mceclip7.png

Editing Collateral Quantity

  • Increasing Collateral Quantity will result in a movement of the Loan Asset from the Borrower to the Lender
  • Decreasing Collateral Quantity will result in a movement of the Loan Asset from the Lender to the Borrower
  • In this example, we are going to increase the collateral by 50 BTC. 1006.21227487 → 1056.21227487
    mceclip8.png
  • From the Lending Platform Operator (188IMJ)'s perspective (again, go to Participants → Balances → BTC url):
    Screen_Shot_2020-10-29_at_8.56.08_PM.png
  • And from the Lending Counterparty (8VX5KD)'s perspective:
    Screen_Shot_2020-10-29_at_8.57.21_PM.png
  • Also, you can see the following field value changes as a result
    • Collateral Quantity: 1056.70786115
    • Current Collateral Coverage (%): 136.58
    • Current Collateral Value (USD): 14,358,284.64
    Screen_Shot_2020-10-29_at_3.22.56_PM.png

Editing Collateral Requirement Percentage, Collateral Top Up Percentage, and Collateral Release Percentage

Changing these fields' values will not directly generate any movements or obligations right away. However, as the loan gets re-valued, it will reference the new values and then movements may occur based on whether the current collateral coverage ratio is sufficient.