Lien NFT

A lien is a right given to a Lienholder to exercise a lien on a property. A lien NFT is an NFT that contains a reference to a document that describes a lien against an asset. This document is placed in a decentralized file store.

Using Plano, the Lien NFT is created voluntarily by the asset owner. The Lien NFT is a guarantee of collateral that will be used to secure a loan. The creator of the Lien NFT will transfer it to a capital provider (typically a Defi platform) in exchange for a loan. For the duration of the borrowing, the Defi platform is the holder of the Lien NFT and is able to foreclose on the property if required.

The nominated Lienholder on the lien document is not the provider of collateral. Instead the Lienholder is someone empowered to act on behalf of the capital provider to call on the lien and foreclose the asset if required. Parties eligible to act as Lienholders are trusted and neutral parties permissioned on Plano who have the capacity to execute lienholder duties within the jurisdiction in which the property is located.