Core Idea: The protocol's core idea is a lien mechanism, which allows users to create conditional ownership of digital assets. By leveraging smart contracts, the protocol enables users to engage in various financial transactions, such as borrowing funds against the digital assets or purchasing assets and paying over time.

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Use Cases:

1. Mortgage: Users can buy and own assets, such as      real estate or vehicles, by representing them as digital assets and paying      the value over a specified period.
2. Rent: Users can rent digital assets, allowing      them to utilize the asset for a predefined period without having to own it      fully.
3. Borrowing: Users can borrow funds by      collateralizing their digital assets and receiving loans in      cryptocurrencies or other digital assets.

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Technical Details :
Below is potential interface for the for the protocol

1. createLien(address      owner, address asset, u32 amount): This      function allows users to create a lien on a specified digital asset. The      input parameters include:  
2. owner: The address of the user creating the lien
3. asset: The address of the digital asset
4. amount: The amount of the digital asset being encumbered by the lien
5. removeLien(address      owner, address asset, u32 amount): This      function enables users to remove a lien on a specified digital asset. The      input parameters include:  
6. owner: The address of the lien's creator
7. asset: The address of the digital asset
8. amount: The amount of the digital asset to release from the lien

1. getLien(address      owner, address asset) returns (u32): This      function retrieves the lien amount of a specified digital asset for a      given user. The input parameters include:  
2. owner: The address of the user
3. asset: The address of the digital asset

By utilizing the Stellar-based DeFi protocol, users can engage in various financial transactions with digital assets, unlocking new opportunities for decentralized finance in real-world asset management.

Extended functionality added to roadmap after community review:

A - End to end lending flow, contract, backend and User interface. Original proposal was for Lien to enable financing, and rental flow only. Added features include: 


1. Setup initial lending terms 

2. List for lending 

3. Servicing which include managing repayment and interest. 

4. Handling payoff and release of collator.

B - Research cron job and auto mpayment, and implement if framework allows.

Plutus Stellar based Open Source DeFi protocol is a decentralized finance solution designed to facilitate conditional ownership of digital assets through a lien mechanism. Built using the Soroban framework  in Rust smart contracts, the protocol serves as infrastructure for other projects to create their own applications, broadening the scope and possibilities of decentralized finance. By representing real-world assets as digital assets, the protocol enables users to engage in a variety of financial transactions, such as mortgages, rent, and borrowing.

Core Idea: The protocol's core idea is a lien mechanism that allows users to establish conditional ownership of digital assets representing real-world assets. Leveraging smart contracts, the protocol provides a secure, transparent, and efficient way for users to engage in financial transactions, such as purchasing assets and paying over time or borrowing funds against the digital assets.

Protocol Infrastructure: As a foundation for other projects, the Stellar-based DeFi protocol offers a robust infrastructure for developers to build upon. By providing a secure, scalable, and efficient framework, the protocol encourages the growth of decentralized finance applications in various domains, such as real estate, finance, insurance, and more.

Soroban: The protocol is built using Soroban, which is designed specifically for developing smart contracts and decentralized applications on Stellar. Soroban enables developers to create secure, efficient, and easy-to-audit smart contracts, ensuring the integrity and reliability of the protocol and its implementations.

Digital Assets Representing Real-World Assets: The protocol's digital assets are designed to represent real-world assets, such as property, vehicles, or commodities. By tokenizing these assets, the protocol allows users to gain exposure to real-world asset classes through the convenience and flexibility of digital asset ownership.

Implementation Use Cases:

1. Mortgage: The protocol enables users to purchase real-world assets, such as property or vehicles, by representing them as digital assets. Users can buy and own these assets and pay for them over a specified period, creating a mortgage-like arrangement. This democratizes access to asset ownership and enables a broader range of individuals to participate in asset investment.
2. Rent: Users can rent digital assets, allowing them to utilize the underlying real-world asset for a predefined period without owning it fully. This provides flexibility to users who do not wish to commit to full ownership, offering an alternative to traditional rental markets.
3. Borrowing: Users can borrow funds by collateralizing their digital assets, allowing them to access credit without liquidating their holdings. This creates new opportunities for lending and borrowing in the decentralized finance ecosystem.

Potential Implementation Partners:

     Initial implementation partners include Real Asset tokenization platforms like Centrifuge, Goldfinch and Mappel Finance.

Regulatory Compliance

Plutus, operating as a second-layer protocol over base protocols like Centrifuge, inherently adopts the compliance mechanisms of these base layers. Compliance to additional regulations, considering Plutus's unique functionalities such as lending, borrowing, and rental of tokenized real estate assets, is also a priority.

Plutus acknowledges the variability of compliance requirements across different jurisdictions. Therefore, specific compliance measures will be implemented as necessary during the establishment of new partnerships and expansion into new areas.

The protocol also maintains communication with base layer protocols to stay informed about any compliance changes. This ensures Plutus's continuous compliance and ability to adapt swiftly to new regulatory landscapes.

Risk

Plutus, as a utility protocol, primarily facilitates terms of engagement between multiple parties. The financial product risk lies with the asset originator who is expected to disclose it per their jurisdiction's compliance requirements. Investors also have the responsibility to perform due diligence.

The primary risk associated with Plutus pertains to smart contract implementation or the underlying blockchain. Measures to mitigate these risks, including obtaining insurance, will be explored in the future.

Assets Tokenization

Similar to protocols like Aave or Uniswap, Plutus does not originate assets or speculate on the value of underlying assets. It serves as a facilitator, providing essential financial functions in a decentralized manner. Plutus self-executes the terms of financial instruments, such as loans, implementing them in a reliable and transparent fashion.

The enforcement of ownership transfer on default is out side the scope of Plutus functionality.

Example: Whoever own a token like NS2DRP, owns the right to the underlying RE assets, Plutus can wrap and implement advanced function like rental, financing, or lending.

Research and develop Lien Smart Contract. Build PoC of contracts and workflow for transfer of assets with a lien on it.  Build test cases for each of the contract functionality.

• Working code repo : https://github.com/arbach/stelien/‍
• Recoded demo:  https://demo.plutus.rentals/‍
• Documentation : https://shorturl.at/DLTU4 and https://plutus-3.gitbook.io/plutus-docs/product-guides/rental-smart-contract-interaction-guide

Step taken already:

R&D already started on Soroban, to understand the framework and design the solution. A strategy for the solution was  built.  Core lien mechanism developed, and PoC rental process implement in command line only.