Banking-Financed Model
Now we explored the peer-to-peer financing model, where individual lenders directly fund real estate-backed loans, an alternative hybrid CeDeFi model enables participation from traditional banks.
The core principles remain unchanged: Tulpea DAO acts as a decentralized financial intermediary, connecting borrowers with institutional lenders. However, in this model, the DAO secures a mortgage loan from a bank, using collective investor capital as the equity down payment. The primary distinction lies in debt ownership—in this setup, the loan is held by a bank rather than individual lenders.
How It Works
Once a real estate project is validated by the DAO, Tulpea partners with institutional lenders to secure financing for the remaining balance of the investment. This strategic partnership is based on mutual value creation:
Banks extend mortgage loans through Tulpea DAO, which assumes the debt under its name while tokenizing the real estate asset.
Investors collectively fund the down payment, ensuring capital efficiency without over-leveraging.
Rental income repays the mortgage loan through structured, amortizing payments.
The property remains tokenized, allowing investors and borrowers to benefit from liquidity and decentralized ownership.
This structure de-risks the financing process for banks, offering a transparent, structured mechanism that guarantees loan repayment and asset security.
Why Do Banks Choose to Lend to Tulpea?
Traditional banks are often reluctant to lend directly to individual borrowers due to lack of established credit history, insufficient collateral to secure the loan and high risk of non-performing loans (NPLs). By acting as an institutional-grade financial intermediary, Tulpea solves these challenges, providing banks with a low-risk lending framework:
Institutional-Grade Risk Management Tulpea ensures that only pre-vetted, high-quality real estate projects gain access to financing. Strict underwriting criteria, minimum capital contributions, and decentralized risk management significantly lower default risks.
Regulatory Compliance All lending agreements are fully compliant with real estate and financial regulations, providing banks with a structured legal framework that aligns with their internal risk policies.
Enhanced Borrower Oversight Unlike direct lending to individuals, Tulpea ensures that all financed properties generate stable rental income, operating within a governed financial framework that reduces exposure to loan defaults.
Asset-Backed Lending with Tokenized Collateral Loans are issued against real estate-backed digital assets, providing lenders with legal recourse and asset-backed security in case of borrower default.
Structure of Institutional Lending Agreements
Fixed-Rate Mortgage Issuance
Banks issue structured, fixed-rate mortgage loans through Tulpea at competitive interest rates, typically lower than DeFi lending rates.
Borrowers repay the loan via structured mortgage payments of Tulpea, using rental income as the primary repayment source.
This model ensures predictable repayment schedules, reducing exposure to market volatility.
Multi-Layered Risk Mitigation
Tulpea integrates several safeguards to protect institutional capital:
Underwriting & Default Protection All projects must meet predefined creditworthiness standards, ensuring strict due diligence before financing.
Reserve Funds In the event of cash flow disruptions or minor defaults:
The Project Reserve Fund (funded by excess rental cash flow) provides the first layer of protection.
The DAO Reserve Fund acts as a secondary buffer for exceptional cases.
REBT Gradual Unlocking
In case of a major default, vested REBT tokens can be mobilized, securing loan repayments without the need for traditional foreclosure processes.
This mechanism ensures continued capital recovery and protects ABS holders from extreme downside risk.
ABS Issuance: Bringing Institutional Debt to DeFi
Banks routinely securitize mortgage loans through Asset-Backed Securities (ABS) to offload risk, optimize liquidity, and comply with regulatory capital requirements.
Using Tulpea, banks can issue tokenized ABS (ABST) directly on-chain, unlocking new liquidity and investment opportunities.
Capital Recycling:
By securitizing and selling ABS, banks can free up balance sheet capacity to issue new loans while maintaining exposure to real estate-backed debt.
Liquidity Enhancement:
Traditional ABS are highly illiquid and accessible only to institutional investors.
Tokenized ABS (ABST) allow on-chain trading, providing secondary market liquidity and enabling DeFi integration.
Expanding Investor Access:
Historically, structured real estate debt has been available only to large institutions due to high capital thresholds and regulatory barriers.
Tokenizing ABS democratizes access, allowing retail and institutional investors to participate in structured mortgage-backed debt markets.
Comparison: P2P Model vs. Banking-Financed Model
Tulpea offers two distinct financing structures:
1️⃣ Peer-to-Peer (P2P) Model, where individual lenders directly finance real estate-backed loans, creating a decentralized debt market. 2️⃣ Banking-Financed Model, where a traditional bank provides the mortgage, and the debt is later structured and optionally securitized into ABS.
Each model serves different types of projects and investors, with unique advantages and considerations.
Key Differences & Use Cases
Feature
P2P Model 🏛
Banking-Financed Model 🏦
Capital Source
Retail & institutional lenders
Institutional bank loan
Loan Structure
Decentralized Asset-Backed Securities (ABST) issued directly to lenders
Traditional mortgage loan, held by the bank, securitized optionally
Interest Rate
Market-driven, typically higher but flexible
Lower, fixed interest rates
Best for
High-yield assets with stable NOI and clear rental cash flows
Lower-NOI properties or assets intended for resale rather than long-term rental yield
Risk Exposure
Direct lender exposure to real estate-backed ABS
Bank assumes loan risk, investors hold securitized ABS (if issued)
Liquidity
Tokenized ABS available for secondary trading
ABS issued by banks are mostly illiquid unless tokenized
Project Suitability
Suitable for projects where decentralized lending and high yield are priorities
Ideal for assets that need stable long-term financing with lower yields
Loan Origination & Repayment
Loan structured through DAO governance, repaid via rental income
Tulpea assumes the bank loan and manages repayments from rental cash flow
Investor Access
Open to retail & institutional investors
Typically limited to institutional investors unless ABS is tokenized
Regulatory Compliance
Decentralized, operates within DeFi frameworks
Full compliance with banking & real estate lending regulations
When to Choose P2P Model vs. Banking Model?
✅ P2P Model for:
High-yield real estate projects with strong, stable NOI.
Investors seeking direct exposure to structured real estate debt.
Properties where DeFi liquidity and tokenization provide strategic benefits.
✅ Banking Model for:
Lower-NOI properties where banks offer lower interest rates.
Projects with a resale-oriented strategy (rather than long-term rental income).
Large-scale assets where institutional credit enhances capital efficiency.
Hybrid Model: Capitalizing on the ADBT/REBT System Through Traditional Credit Markets
Tulpea’s ABDT/REBT architecture extends beyond the on-chain ecosystem. It offers a structured and credible framework for engaging with traditional financial markets, particularly private credit institutions. Because ADBT and REBT are backed by real-world assets, Tulpea can facilitate peer-to-peer asset financing, then leverage these same assets within TradFi frameworks to enhance capital efficiency.
This setup enables the creation of multiple financial structures around the underlying asset — including mortgage-style mechanisms with traditional financial institutions. Both unlocked REBT tokens held by borrowers and ADBT tokens (collateralized by locked REBT) can be pledged to secure low-interest funding from institutional lenders.
Example: TradFi Mortgage Vault
Tulpea can structure dedicated mortgage vaults with the following characteristics:
Capital raised from institutional lenders at competitive fixed rates (target: <3.5% per annum)
Collateralization based on conservative Loan-to-Value ratios (e.g., 70%)
Non-dilutive structure: no token issuance, no equity dilution, no impact on DAO governance
Use of proceeds: reinvestment into non-directional, market-neutral DeFi strategies generating >10% APY
This strategy enables Tulpea to arbitrage global capital costs, activate latent value within its internal debt system, and transform traditional liquidity into high-performance on-chain yield — all while maintaining full control and sovereignty at the protocol level.
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