Understand AmFi pools. Our first product are liquidity pools… | by AmFi.Finance | AmFi

Our first product is Liquidity Pools, designed to help companies build and operate funding pools that use tokenized financial assets as collateral.

The goal is to fund a variety of real-world companies and offer investors around the world a range of new investment products with predictable returns, backed by real-world assets.

To create these pools, AmFi is developing an on-chain lending infrastructure alongside off-chain payments and legal solutions that comply with current local regulations. This way, the operational experience is as smooth as possible and can be run easily when needed.

AmFi pools connect all users of the AmFi platform (agents, borrowers and investors) in one place.

And how exactly do AmFi pools work?

Complete overview of AmFi pools

Fintech companies wishing to become agents go through our registration and onboarding process which includes:

Do you know your partner (KYP) check over;

Pool Policy Definition: Pool terms and conditions that set the rules by which the pool smart contract will operate, such as: B. Pool size, agent information, eligibility criteria, fees, etc.

· Broker Agreement: General terms and conditions to which the broker is subject. The goal is to establish responsibilities for the platform itself, not specific to a product.

After registration and onboarding, a ready-made SPV company is automatically bound to the pool to be created and has all the legal ties needed for cash flow and custody of the funding operations.

To fund the pool, the SPV issues a debt instrument. By investing in our pools, investors buy portions of that debt instrument and receive tokens representing their share of that pool.

Agents are required to contribute a certain amount of capital to the pool as first-loss capital, also known as junior tranche. Investors can invest in the senior tranche, which offers lower yields but is less risky. Learn more about it here.

Once investors allocate funds to the pool, it can begin operations.

Borrowers who are clients of these fintechs go through the following steps:

· The agent carries out the KYC check of the borrower.

· After the loan application has been analyzed and approved, the borrower’s collateral is tokenized and verified against the pooling policy.

Upon approval by the pool policy, the pool takes ownership of the asset token and releases the funds.

AmFi’s proprietary off-chain integrations ensure fiat currency funds reach the right destination.

After the borrowers have repaid their loans, the pool has cash again and the cycle begins again. The operation is continuous, which means that the repayments flow back into the pool’s coffers (at a profit) and can be used immediately for new business, unless an investor has requested a withdrawal.

How do AmFi pools differ from traditional funds?

1: The funds buy the claims from the originators and have the right to receive them from the debtor;
2: When collateral is provided, it is analyzed to determine if it meets the eligibility criteria for which the pool was created. If approved, it is tokenized and held by the pool.

One of the key differences between AmFi pools and traditional funds is that traditional lending requires a time-consuming process and constant verification of client status.

Smart contracts take care of the entire verification process and make it easier for both the borrower and the intermediary.

AmFi offers fintechs more options and access to liquidity, making it easier for them to structure, distribute and operate their financial products at scale.

Investors can access new and improved financial products backed by appropriate, verified and auditable tokenized financial assets. AmFi acts as a link between brokers and investors by providing a system of eligibility criteria.

By tokenizing the funds flowing into credit pools, an untouchable, secure and transparent on-chain credit history is created, enabling potential investors to analyze and make better investment decisions.

What are the advantages?

Accountability: The blockchain is a public ledger that can provide records of all loans made through AmFi pools. This means that the operational performance of the pools is untouchably registered on the chain and can be verified by investors.

Speed: AmFi pools can be created in just two weeks! Loans are processed quickly and the requested amount is available within minutes of loan approval. Investors can request a withdrawal at any time during the process.

There are many more benefits! We’ve listed five reasons investors will love AmFi Pools and five reasons fintechs will benefit from AmFi Pools. Read!

Let’s create the next generation of capital markets together.
Learn more about AmFi: https://linktr.ee/amfi.finance

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