[V0 Looking for feedback] Warranty Contract, a next-gen DeFi Primitive
What is a Warranty Contract?
Warranty Contract is the provisional name of a next-gen DeFi Primitive that is also a perfect fit for Nervos L1 cell model.
A Warranty Contract is a special type of contract that operates like a two-sided agreement, represented as a functional Non-Fungible Token (NFT). In this contract, there are two main roles: the Warranty Issuer and the Warranty Holder.
Roles Explained
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Warranty Issuers:
- This entity creates the Warranty Contracts and set their details.
- They can choose:
- Assets involved: for example a specific NFT and 4200 USDI. (Or for example a specific NFT, 4200 USDI and 4200 RUSD: this lets the Warranty Holder choose between paying in USDI or RUSD)
- Initial Supplied Asset: for example the specific NFT artwork being wrapped into the Warranty Contract.
- Active duration: for example 2 years.
- Initial Fee: for example 42 USDI, not covered by the Warranty Contract itself, but possibly refundable at the choice of the Warranty Issuer.
- Once created, they can post their active Warranty Contracts for sale in a Markeplace of their choice.
- Once expired, they can claim the remaining asset from the Escrow, being it the the Paid Amount or the Original Asset.
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Warranty Holders:
- They can buy a Warranty Contract from the Warranty Issuer by paying the Initial Fee, usually non-refundable.
- Once they have the Warranty Contract, they can:
- Pay in Full the Asset wrapped in the Warranty Contract to extract the Asset and get ownership of it.
- Since they Paid Amount is held in Escrow in the Warranty Contract, they can change their mind between the Asset and the Paid Amount as many times as they want until the Warranty Contract expires.
- No extra fees are applied in relation to these changes of mind for the duration of the Warranty Contract.
Both Warranty Holders and Warranty Issuers can transfer their role to someone else.
Benefits for Users
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For the Warranty Holder: They benefit from the ability to enjoy more flexible ways of purchasing assets. They can change their mind as many times as they want on the Asset thanks to the use of an Escrow. This allows them to understand at their leisure if the Asset provides the value for which is being sold. Also they can capitalize on the Asset transient market fluctuations, without committing to the asset purchase.
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For the Warranty Issuer: They can offer their assets targeting more effectively user needs. They earn an initial fee from the Warranty Holder when the contract is accepted. After the contract ends, they can claim the remaining asset from the Escrow, being it the the Paid Amount or the Original Asset.
Conclusion
The Warranty Contract offers a unique opportunity for both Warranty Holders and Warranty Issuers in the decentralized finance (DeFi) space. Warranty Holders benefit from the ability to enjoy more flexible ways of purchasing assets, while Warranty Issuers can offer their assets targeting more effectively user needs. This structure creates a dynamic space where users can leverage their expectations about asset values.
Requested Funding
Similarly to the [DIS] iCKB & dCKB Rescuer Funding Proposal (Non-Coding Expenses), the Open-Source development of the Warranty Contract could be sponsored by the Nervos Foundation, while the CommunityDAO could sponsor the audit of the contracts, deployment of the contracts on-chain as a public good and hours spent for user & dev support.
More details at a later date!!
Log of Changes
This proposal is gonna be updated many times as it becomes more refined and a perfect name is discovered for this contract. Follows the log:
- Pivoted from “
” Contract to Warranty Contract. This change underlines the utility of this contract within the creators economy.
Feedback
Do you have any doubt or question? Please feel free to ask and provide any feedback!!
Do you have any particular name suggestion?
Love & Peace, Phroi