Third Party Liquidity Pools and NFT Liquidity Providers (NLP)

Third-party Liquidity Pools and NFT Liquidity Providers
From time to time, the HOM Protocol will facilitate the sale of Loan-NFTs to third party entities, much like traditional mortgage loans are sold to investors that then repackage the “paper” as Mortgage-Backed Securities. Liquidity from the sale of the Loan-NFTs is then provided to the DAO treasury, making it possible to provide loans for more properties.
In the HOM Protocol, the term for the entities that purchase these loans and turn them into crypto bonds is an NFT Liquidity Provider (NLP). The NLP may be a registered security or a DAO. When the NLP buys the Loan-NFTs (loan “paper” in traditional parlance), it provides liquidity to the DAO, and takes the asset off the DAO’s treasury and balance sheet, freeing up liquidity to issue more loans.
Ultimately, the volume of property loans that can be facilitated by the HOM Protocol are a function of the market demand for buying loans.
SLIDE: How selling HOM loans to a NLP creates the ability to make more loans without adversely affecting the HOM Treasury.
The theory of the HOM DAO is that the demand for a new class of crypto bonds secured by property and delivering regular returns (for example 5%) will become a cornerstone of DeFi’s future. Already DAO such as Maker DAO, creator of DAI, has started buying loans for property and real world assets. The thesis of these crypto bonds is that they could replace stablecoins as a transactional currency in DeFi as they are based on real world assets and are not subject to inflationary pressures (e.g. “government stealing”) inherent to fiat-based stablecoins.
At the end of the loan term, typically 10, 20, or 30 years, the loan owner will pay off the loan, and the title, which is held by the DAO Trust, has any claim to title removed from the NLP, and can be completely recorded in the property owner name.
HOM DAO plans to engage existing real estate companies and service providers, such as mortgage companies, real estate brokers, appraisers, and title companies, with the appropriate licenses in their respective countries to work in agency with the HOM DAO Trust in that country to facilitate the process of underwriting, originating, monitoring, and enforcing rights during the lending lifecycle.