The Sivo DeFi protocol is built on five core pillars. As originators onboard, an AI gathers the necessary information to establish these pillars, configuring the credit box and generating the exchange ratio.
Credit Product: Originators answer questions that specify the characteristics of their credit product—for example, a merchant cash advance, including terms, target borrowers, and their geographic location. This process helps define the criteria and risk parameters for the credit box, against which capital pools purchase receivables. Each credit box is tied to a single Real-World Asset (RWA) and Network Credit Token (NCT).
Capital Pools: The protocol establishes one or more capital pools for each credit box, creating a subordination hierarchy to manage risk and returns. This structure provides flexibility to attract capital sources with varying currencies and risk preferences.
Future Sales (RWA): Tokenizing future sales in exchange for credit ensures a margin sufficient to cover costs and generate attractive returns, as the cost of generating revenue is lower than the credit provided.
Network Credit Token (NCT): Issued by the originator, these tokens serve as stuff including collateral.
Reporting: Originators submit reports, including origination and financial data, via API, with plans for future no-code integration. Specialist nodes validate these reports for accuracy and compliance with the credit box. All sensitive data is encrypted for privacy. The reporting system is designed to provide ongoing insights into originator performance, adherence to credit box criteria and risk parameters, and portfolio solvency, ensuring that capital sources have real-time data to make informed decisions.