Pool Collateral token
Introduction to Collateral Token
In the CollabAI ecosystem, the Collateral Token is a specialized asset that offers investors rights to liquidation cash flow if a curator fails to meet contract terms. This token is designed to protect investors by ensuring they can reclaim funds in cases of curator non-compliance, such as below-market cash flow distribution, loss of GPU ownership, or falsified cash flow reports. The Collateral Token provides peace of mind, knowing that investors’ funds are safeguarded against potential risks in GPU-backed investment pools.
Key Properties of the Collateral Token
Unique Asset Identification:
Each Collateral Token has a unique asset ID defined by the formula:
Asset ID = 1,000,000,000,000,000 * pool_id + pool_total_epoch
This identifier links the token directly to its specific investment pool and proposal duration, ensuring clear traceability and accountability within the ecosystem.
Right to Liquidation Cash Flow:
The Collateral Token grants holders the right to liquidation cash flow if a curator fails to uphold their business contract.
Guardians have the authority to determine non-compliance, which could include cases where:
The GPU cash flow distributed is significantly below the market average.
The curator no longer owns the GPU assets.
The curator provides falsified cash flow reports.
When such issues are confirmed, a liquidation process is triggered, allowing token holders to recover their portion of the pool’s assets.
Proportional Refund Distribution:
Upon liquidation, the recovered funds are distributed based on the portion of Collateral Tokens held by each investor.
This ensures fair and transparent allocation, with each token holder receiving a refund amount proportionate to their initial investment share.
How Collateral Tokens Protect Investors
Assurance of Asset-Backed Security: The Collateral Token links investor interests to real assets, ensuring that funds can be reclaimed if the curator does not meet contractual obligations.
Guardians as Oversight: Guardians play a critical role in validating curator performance. If discrepancies arise, Guardians can initiate the liquidation process, upholding investor protections.
Clear and Transparent Distribution: With the unique asset ID system and proportional refund approach, investors are assured of clear and equitable treatment during the liquidation process.
Benefits of Holding Collateral Tokens
Enhanced Investment Security: The Collateral Token provides an additional layer of security, allowing investors to mitigate risks associated with curator non-performance.
Automatic Liquidation Rights: Token holders are entitled to liquidation proceeds, providing liquidity if GPU-backed cash flow expectations are not met.
Transparent Tracking and Accountability: The unique asset ID enables precise tracking and verification, reinforcing trust in the CollabAI investment pools.
The Collateral Token is a vital tool within CollabAI, ensuring that investor funds are protected and recoverable. For more details on CollabAI’s Collateral Token, please visit the CollabAI platform.
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