Borrowers’ Perspective

Borrowers benefit from an innovative financing structure that allows them to access leveraged real estate investments with minimal capital requirements while maintaining financial security.

Key Advantages for Borrowers

• Access to Scalable Credit: Borrowers can leverage real estate assets without requiring full collateral, significantly lowering entry barriers for property investors across all financial backgrounds.

• No Impact on Traditional Credit Score: Unlike traditional bank loans, Tulpea’s financing model does not affect a borrower’s credit score, allowing greater flexibility in financial planning.

• RWA Accumulation Over Time: Borrowers progressively gain full ownership of their real estate assets rather than perpetually servicing debt, ensuring long-term wealth creation.

• Predictable Repayment Model: Unlike traditional DeFi loans prone to sudden liquidations, Tulpea ensures a structured repayment schedule, eliminating forced liquidations due to collateral volatility.

• Automated Debt Servicing via Yield Flow: Rental income is programmatically allocated to cover debt obligations, reducing the borrower’s financial burden and enhancing loan sustainability.

• No Active Property Management Required: Professional real estate management partners handle property maintenance and tenant relations, minimizing operational overhead for borrowers.

• Liquidity Retention: Despite holding a leveraged real estate position, borrowers retain access to liquidity through tokenized ownership.

• Potential Additional Yield: In cases where the property generates positive net cash flow, borrowers can receive an additional yield, further enhancing their financial position.

Risk Mitigation for Borrowers

While the primary financial risk is borne by lenders—ABST holders—borrowers must follow a structured repayment schedule through Tulpea to achieve full ownership of the asset. However, Tulpea’s framework minimizes direct risk exposure:

• Underlying Real Estate Risk

  • Borrowers are inherently exposed to real estate market, which can impact the REBT value.

  • Tulpea’s decentralized risk assessement process, combined with the DAO approval mechanism—including Curators, Analysts, and $TULIP holders—mitigates this risk by ensuring that only high-quality, risk-adjusted properties receive financing.

  • Comprehensive insurance coverage is secured to protect the property against structural damage, unforeseen events, and market downturns, further reducing risk exposure.

• No Risk of Liquidation from Market Fluctuations:

  • REBT are vested and progressively unlocked. In case of major default, the DAO can vote to mobilize only vested REBT to compensate lenders, ensuring the overall stability of the system.

  • Since repayments follow an amortizing debt model, properties are gradually paid off, avoiding the sudden liquidation risks commonly associated with over-collateralized DeFi loans.

  • This mechanism prevents borrowers from suffering immediate capital loss, as partial property ownership is retained even in distressed scenarios.

• Minor Default Contingency:

  • Tulpea’s reserve funds will be mobilized to cover minor delinquencies, preventing immediate repossession and allowing for restructuring options.

  • Thus, even in the event of cash flow fluctuations, there is no immediate risk of default.

By integrating these borrower-focused protections, Tulpea ensures a balanced risk-reward structure, making leveraged real estate investment accessible while safeguarding financial sustainability.