Sweepr has constructed a collateral agent to represent stabilizers - the DeFi lenders. It makes off-chain agreements with borrowers and takes collateral pledges.
The collateral agent will qualify as a secured party with the Pledgor, and with bankers, custodians and brokers. The collateral agent will interface with these parties for signing and operations
The collateral agent should write estimated asset valuations to the stabilizer. It will write the market value of the related securities portfolio after every trading day. It may provide other types of reporting.
The collateral agent will monitor for default conditions such as:
- The borrower did not respond to a repayment request
- Capital ratio in the stabilizer is below the minimum requirement
- Not following the mandate
The collateral agent will deliver notifications to the borrower.
The collateral agent will administer liquidations and deliver the proceeds to the stabilizer. The collateral agent will not have the skills to engage in a workout. It will sell the collateral assets (along with any relevant agreements and stabilizer assets) to an expert liquidator.
In the case of securities, the collateral agent will instruct the custodian or security agent to sell the securities. It will handle the conversion of the USD proceeds from into stablecoins and deliver them to the Stabilizer for the immediate repayment of loans.
Accounting will be handled in the stabilizer. If there are funds left after repaying loans, they will be allocated to the junior tranche, and the borrower can withdraw them.
The collateral agent will receive a negotiated fee from the borrower to cover its costs