Collateral Facet

A brief description of the Collateral facet

Facet description

The Collateral Facet plays a crucial role in the the system, where cooperative loans are facilitated through a turn group rotating savings scheme. This facet is responsible for managing the collateral deposited by users when participating in a term. Additionally, it handles various scenarios related to defaults, ensuring the integrity of the savings scheme.

Key features

1. Collateral Management: The Collateral Facet is responsible for overseeing the collateral deposits made by users when they join a term. It controls the deposited collateral for each participant.

2. Default Handling: In the event of a participant defaulting on their payment obligations during a term, the Collateral Facet manages the process of using a portion of the deposited collateral to compensate for the lack of payment. The specific actions taken during a default scenario are determined by this facet based on the circumstances.

3. Expulsion: The Collateral Facet is to expell users when they meet the requirements for expulsion. In all cases, this is linked with an insufficient amount of collateral.

Use cases

• Security and Default Compensation: The Collateral Facet serves as a critical security measure within the term. It requires participants to deposit collateral, which acts as a financial safeguard. While it may not prevent defaults, it plays a pivotal role in compensating for defaults. In the event of a participant defaulting on their payment obligations, the facet utilizes the deposited collateral to compensate for the lack of payment. This security feature enhances the overall integrity of the cooperative loans scheme, discouraging participants from walking away with the pooled funds and providing a mechanism for recovering losses due to defaults.

Function signatures

You can find the function signatures of this facet below.

Collateral Facet Functions