Institutional Lenders’ Perspective

Institutional lenders are not indispensable in Tulpea’s protocol, as some projects can be financed entirely through direct ABDT issuance. However, when included, they gain structured exposure to a real estate-backed lending market with hig yield.

Key Advantages for Institutional Lenders

• Scaling Opportunity Size, Reducing Due Diligence Time: Institutional lenders can cover multiple borrowers with larger amounts by structuring a single debt, significantly optimizing time allocation for due diligence and streamlining the lending process.

• Higher Potential Returns: Interest rates are potentially higher compared to traditional credit markets.

• Participation in Structured, Tokenized ABD Markets: Institutional lenders gain access to a digitally structured debt market, enhancing liquidity and expanding institutional-grade investment opportunities.

• Expanded Investor Base: By integrating ABD into Tulpea’s ecosystem, institutions can reach a broader investor audience, including both traditional finance participants and decentralized finance users.

• Enhanced ABS Liquidity: Traditionally, real estate ABS are highly illiquid instruments. Through Tulpea’s tokenized secondary markets, institutional lenders benefit from improved tradability and capital efficiency.

• Automated Risk Distribution: Lending conditions are enforced through transparent, algorithmic governance, reducing operational overhead and enhancing risk-adjusted returns.

• Scalable Infrastructure for Real-World Asset Financing: Institutions can efficiently deploy capital into yield-generating, tokenized real estate debt, optimizing their asset allocation while ensuring a compliant and structured lending process.

Risk Mitigation for Institutional Lenders

Institutional lenders are subject to the same risks as P2P lenders:

• Default Risk Protection:

  • Lenders do not bear the direct risk of borrower selection. Instead, they lend to Tulpea DAO, which acts as the trusted intermediary responsible for project viability, property management, and financial structuring.

  • By removing direct borrower risk, lenders can invest in real estate without evaluating individual creditworthiness, income stability, or borrower reliability.

  • In case of major default, vested REBT held by borrowers can be mobilized by the DAO to compensate lenders, ensuring system stability.

  • The DAO has a vested interest in maintaining lender confidence—protecting lenders is essential to Tulpea’s credibility and long-term viability.

  • This mechanism functions as an economic alignment model, where Tulpea DAO's long-term financial health is directly tied to lender confidence. By ensuring that lender capital is protected, the DAO maintains its credibility, sustains ABDT demand, and preserves the value of its ecosystem, including $TULIP. This creates a self-reinforcing loop where lender security translates into continued DAO growth and financial sustainability.

• Minor Default Contingency:

  • Reserve funds, collected from borrower fees and operational fees, are allocated to cover minor defaults or temporary liquidity gaps related to property management.

  • This ensures that temporary payment disruptions do not impact lender returns, reinforcing the resilience of the lending system.

• Asset Selection:

  • The asset validation process is fully transparent, leveraging the expertise of Tulpea, Curators and Analysts to ensure only high-quality investments are financed.

  • Each asset must strictly align with the investment thesis, which is designed to optimize risk-adjusted returns while maintaining capital efficiency.

  • A rigorous financial analysis further mitigates risk, incorporating:

    • Debt Service Coverage Ratio (DSCR) > 1.2, ensuring the asset generates sufficient income to cover debt obligations.

    • Comprehensive Net Operating Income (NOI) assessment, integrating all relevant variables that may impact yield and long-term performance

By offering a regulated, scalable, and efficient tokenized debt market, Tulpea provides institutional lenders with a unique opportunity to participate in a hybrid TradFi-DeFi lending ecosystem, ensuring structured risk exposure with enhanced capital efficiency.