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description: Describes the different components of the protocol
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# Architecture

### Layered Component Diagram

![Fig 1: Shows the different layers of this ecosystem. The different parts are described below.](https://4199744630-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FpOZS1e8TgIjQkJFsm2MF%2Fuploads%2F0nR5rndfyt9fstTDtSrz%2Foverall_components.jpeg?alt=media\&token=17a7fcf9-3051-4017-9fdb-3b389182d9a3)

#### MOBILE APP / RESPONSIVE WEB APP:

The final touchpoint for the user is a simple mobile app / responsive web-app, where they will interact with the platform backend without having to know the different complex interactions the platform handles for them.

#### Layer 1: IDENTITY ON BLOCKCHAIN

This layer is there to register the user on the blockchain (user metadata). We may need to integrate technology such as Atala prism for this as they already have this module in place.

#### Layer 2: BACKGROUND DATA TO HELP TOKENISE THE ASSET

Before we can tokenise the asset we need various information about the real world asset as well as about the owner of the asset. In that respect an initial modules that satisfy these are:

1. Risk assessment & Credit rating Module: Using these modules we are able to fetch the past credit and salary payments of this person. Also outstanding debts and liens in the name of this person can be retrieved. Using the above and the current real estate the person is putting up on the platform, we issue a rating and max bidding / interest rate chargeable on the asset can be obtained.
2. KYC + AML module: Know your customer and Anti money laundering module where we will have to study the capital flowing and the person involved in that, so that we are not held responsible for these anti-regulatory behaviour.
3. AI module for determining market value of real estate: Using these modules we can derive the housing prices based on the geographic location and the recent buy/sell prices of similar real estate in the neighbourhood.

#### Layer 3: SMART CONTRACT TO ISSUE NFT AGAINST THE ASSET

Based on the information provided by L2 we use a smart contract to issue an NFT equivalent in value to the requested Loan amount against the real estate. This NFT issuance will be hence put as a debt against the house and reported to the local authorities where the house is registered. Thus it will be a Lien against the house, and provides the right of the Lien owner (the lender) to get the amount back in case the borrower defaults.

#### Layer 4: DAO (DECENTRALISED AUTONOMOUS ORGANISATION) MODULES

In this layer we can have separate modules that can be attached to the NFT issued on the platform (L3), via the DAO.

Below is the description of the different modules

1. **TREASURY :** This module takes care that a part of the transaction costs that happens due to the asset transactions goes into the treasury and this reserve will serve the real world funding needs of this asset for maintenance, legal advice, liquidation agency fees and such other needs. This module will also hold 10% -20% of the asset tokens which cannot be transacted at all and can be used in extreme case of bad weather scenario.
2. **TRADING:** This module takes care of the distribution of the tokens (NFT-bond or equity tokens) from the initial owner to the investors and then subsequent trading among the investors. This trading will have the facility to trade under regulated environment of country laws.
3. **STAKING:** This module will take care of using the treasury funding module and distribute the stakes among different stake pools, so that the locked up capital can be used to secure the Cardano Network and gain staking rewards in return.
4. **LIQUIDATION:** This module will take care of bad weather scenario, where the borrower could not return back the capital that was taken. Think of NFT-bond issuance principal and interest is not deposited on time, and this default needs to be handled or rental payments using cryptocurrency is not paid and hence a default occurs.
5. **PRICE ORACLE:** All transactions of tokens that happen within the DAO of an asset, can be published on-chain using this module and this data feed then can be used to feed real estate synthetic assets created for derivative trading.
6. **TAXATION:** According to the country laws, this module will create compliance modules for respecting tax payment rules for all equity token transactions.
7. **GOVERNANCE:** The governance needs of the DAO will be handled by this module. Think of staged voting for decision making. On chain decision making especially related to real estate topics. And host of related issues.
