Innovative DeFi P2P Loan Agreement
In our previous article, we gave our community a deep dive 🤿 into our AML (Anti-Money Laundering) policy. This policy helps keep our harbors safe and it is a FinCEN requirement to have one in place. In this article, we share the loan agreement to which all ReserveLending parties must agree in order to deposit, earn and borrow.
You may be asking yourself, why would someone or an entity agree to a P2P loan agreement in a decentralized, permission-less ecosystem? To protect themselves! The open ocean 🌊 of DeFi can be a very scary place, connecting your wallet to a malicious DeFi protocol or engaging with malevolent counterparties can result in your ship sinking to the bottom of the ocean and your coins lost at sea.
At unFederalReserve, we believe that everyone has right and an obligation to understand and agree to the terms and conditions under which they engage with one another. This level of transparency and commitment will be the standard for all things crypto, and we seek to maintain our thought-leadership role in shaping that future.
The current platform does not require username or advanced profile information in order to use the software. However, all wallet holders are prompted to read and agree to the P2P loan agreement.
In the vast world of web3, there are too many lines of code behind the scenes that go unnoticed, and our job at unFederalReserve is to make DeFi safe and transparent for everyone, including institutions.
Lastly, if you are a U.S.-based DeFI protocol and you do not have something like this already in place, please take advantage of our generosity and use for your platform, today. All boats rise.
Before anchoring ⚓ your ship to our pier, go over the P2P DeFi loan agreement that keeps yourself and our safe harbor on the map 🗺️.
*for any questions regarding our agreement, please visit our forum*
RESIDUAL TOKEN P2P LOAN AGREEMENT
The Platform, among other things, provides users with access to peer to peer lending in the form of digital Tokens through the Platform which enables the staking of Tokens via an online medium to a wide range of third party borrowers (each a “Borrower”) and lenders (each a “Lender”). By using this Platform, you acknowledge and agree to the following:
a. Residual Token does not provide any investment advice and does not act as a broker or dealer in facilitating any transactions on the Platform.
b. Residual Token does not provide any due diligence or know your customer authentication on any Borrower or Lender or their related Tokens, and Residual Token has not approved or disapproved any Borrower, Lender or any Tokens.
c. Borrowers and Lenders shall obtain appropriate independent advice involving any Smart Contracts. The content and material available via the Platform is for informational purposes only and should not be regarded as an offer, solicitation, invitation, advice or recommendation to participate in any particular loan or loans or otherwise buy or sell investments, securities or any other financial services or banking products. Borrowers and Lenders should contact an independent legal and financial advisors when determining whether to participate in Smart Contracts or use the Platform.
d. Residual Token shall be entitled to rely upon the agreements, acknowledgments, representations, and warranties made by each Borrower and Lender in connection with these Terms, and shall not be liable for any loss or damage suffered as a result of such reliance. Residual Token shall be under no obligation to inquire into and shall not be liable for the validity of any Tokens or Collateral (as defined below) loaned through usage of the Platform or any Smart Contracts or the legality of any loans made thereunder.
If you are a Lender, you further agree, acknowledge, represent and warrant as follows:
a. You have read these Terms and fully and completely understands the risks identified herein.
b. You have complied with all applicable state, federal and local laws.
c. You have valid title to all Tokens you stake for lending through the Platform and have read and understand the Residual Token’s sale authorizations as discussed in these Terms.
d. You have carefully considered the risks involved with using the Platform and also the risks associated with peer-to-peer lending and as set forth in these Terms.
e. Your use of the Platform and any transactions facilitated through the Platform will not violate any law, ordinance, charter, by-law or rule applicable to you, or any other agreement by which you are bound.
f. You understand that when you stake Tokens through the Platform, you are making such staked Tokens available to be borrowed by a Borrower via peer-to-peer lending and are not lending any Tokens to Residual Token.
g. You understand that Residual Token has not conducted any know your customer process on any Borrower and you are not relying on the Platform for authentication, determination of creditworthiness, or other factors when determining whether to stake Tokens on the Platform.
h. You understand and agrees that Residual Token, its officers, shareholders, directors and employees are not engaged in the business of providing any investment advice in any form (including publication or writings) or providing advice on investing, purchasing or selling of Tokens.
i. You understand that Residual Token receives a Reserve Factor.
j. You understand that Residual Token is a Software as a Service entity and Smart Contracts implemented into the platform hold Tokens pursuant to such Smart Contracts.
k. You understand that each Lender and each Borrower are anonymous third parties and Residual Token is not at all responsible for the acts of and Lender or Borrower.
l. You understand any Tokens that are staked through the Platform and any Smart Contracts entered into through the Platform may or may not be registered with any regulatory authority and a regulatory authority may or may not have conducted a review of the Tokens or any disclosures related to transactions taking place on the Platform.
m. You understand that the Platform is controlled by Residual Token; however, certain decisions related to the business of the Platform and Residual Token are governed by a decentralized decision making process.
n. You understand and agree that ownership of Tokens and use of the Platform may result in risky investments and Lender is at risk of losing all or some of the Tokens staked through the Platform.
o. You understand agrees that even though Residual Token is currently registered as a money service business with FINCEN, the regulatory requirements of the Platform are uncertain and subject to change in the future.
If you are a Borrower, you further agree, acknowledge, represent and warrant as follows:
a. You have read these Terms and fully and complete understands the risks identified herein.
b. You understand and have reviewed the terms of Residual Token’s sale authorizations set forth in these Terms.
c. You have carefully considered the risks involved with using the Platform and also the risks associated with peer-to-peer lending, including but not limited to, the possibility of losing the Tokens you use as Collateral (as defined below).
d. Your use of the Platform, any Smart Contracts in connection with borrowing Tokens and granting a security interest in Collateral, and any other transactions facilitated through the Platform will not violate any law, charter, or other agreements applicable to you, or any other agreement by which you are bound or by which you or your assets are affected.
e. You understand that any staked Tokens are at risk for loss.
f. You understand that Residual Token, its officers, shareholders, directors and employees are not engaged in the business of providing any investment advice in any form (including publication or writings) or providing advice on investing, purchasing or selling of Tokens.
g. You understand that Residual Token is receiving a Reserve Factor through the Platform.
h. You understand that Residual Token is a Software as a Service entity and Smart Contracts implemented into the Platform hold Tokens pursuant to such Smart Contracts.
i. You understand that each Lender and each Borrower are anonymous third parties and that Residual Token is not at all responsible for the acts of any Borrower or Lender.
j. You understand any Tokens that are staked and any Smart Contracts entered into through the Platform may not be registered with any regulatory authority and a regulatory authority may not have conducted a review of the Tokens or any disclosures related to transactions taking place on the Platform.
k. You understand that the Platform is controlled by Residual Token, however certain decisions related to the business of the Platform and Residual Token are governed by a decentralized decision making.
l. You understand that even though Residual Token is currently registered as a money service business with FINCEN, the regulatory requirements of the Platform are uncertain and subject to change in the future.
LENDING VIA THE PLATFORM
An entity that is eligible to be a Lender pursuant to these Terms may stake Tokens on the Platform, and the Platform will facilitate a loan of those Tokens to a Borrower. A Lender will be entitled to interest on Tokens it stakes as provided in the underlying Smart Contract. A Lender may attempt to withdraw the amount of Tokens it has staked at any time; however, any withdrawal of Tokens from the Platform is subject to the liquidity of the Platform. For example, if a Borrower repays his/her/its loan, the Borrower may not be immediately able to withdraw the Tokens that he/she/it previously used as collateral if there is not sufficient staked, but not borrowed, Tokens in the form such Borrower is trying withdraw.
If you are a Borrower and stake Tokens on the Platform, you may be permitted to use your staked Tokens as collateral to borrow other Tokens from a Lender equal to a specific collateral factor, which is represented and described as a percentage of the current value of your staked Tokens (the “Collateral Percentage”). Each Token may have a different Collateral Percentage, and we reserve the right to set the Collateral Percentage for any Token and adjust an existing Collateral Percentage up or down, in our sole and absolute discretion, at any time. We will provide you with notice of such changes to the Collateral Percentage with thirty (30) days’ notice, and such notice may be posted on the Platform.
If you are a Borrower, you hereby assign and grant a security interest in the Tokens you stake on the Platform (the “Collateral”) to Residual Token, as collateral agent for the Lender who lends you Tokens, to secure repayment of the Tokens you borrow, and you acknowledge that Residual Tokens, as such collateral agent, holds and has possession of the Collateral for the benefit of such Lender. Residual Token shall have the authority to do or cause to be done all acts by and on behalf of each of the Borrower or Lender as it shall determine in good faith to desirable, necessary and appropriate to implement and administer the administration and management of Collateral.
Any withdrawal of staked Cryptocurrency Assets is subject to the liquidity of the Platform. For example, if a Borrower repays his/her/its loan, the Borrower may not be immediately able to withdraw the Tokens that he/she/it previously used as collateral if there is not sufficient staked, but not borrowed, Tokens in the form such Borrower is trying withdraw.
If the value of the Collateral declines below the Collateral Percentage, the Borrower who has staked the Collateral and its corresponding Lender authorize and direct Residual Token, as collateral agent for the Lender, to sell Collateral to third parties so as bring the total value of the Collateral in compliance with the Collateral Percentage then in effect.
If you are a Borrower and (i) you fail to repay your loan when you are required, (ii) you violate any of your agreements in these Terms, or (iii) any of your acknowledgments, representations, or warranties in these Terms are untrue, you and your Lender authorize Residual Token, as collateral agent for the Lender, to do any one or more of the following: (i) sell the Collateral to third parties and apply the proceeds to the repayment of your loan or (ii) exercise and other rights or remedies at law, in equity, or otherwise.
If you are a Borrower, you waive all rights to notice and a hearing with respect to the sale of Collateral as provided in these Terms. Each Borrower further acknowledges that any sale of Collateral as described in these Terms will likely be at a discount from the prevailing market rate for the Tokens that are Collateral and may involve payment of transaction fees and costs in connection with such a sale. Each Borrower acknowledges that this discount and payment of fees and costs from the Collateral is necessary in order to facilitate a prompt liquidation of the Collateral. Each Borrower acknowledges and agrees that Residual Token is entitled to use its sole and absolute discretion when determining a discount rate for the Sale of of Collateral.
THIRD PARTY RISK
We do not own or control the underlying wallet provider or other underlying protocols that are open source and anyone can use, copy, modify and distribute them. We assume no responsibility for the operating of the underlying digital wallet providers or third party protocols and we are not guaranteeing functionality or security of such networks or operations. Further, The Site may contain hyperlinks or references to third party websites. Any such hyperlinks or references are provided for your information and convenience only.
We have no control over third party websites and accept no legal responsibility for any content, material or information contained in them. The display of any hyperlink and reference to any third-party website does not mean that we endorse that third party’s website, products or services. Your use of a third-party site may be governed by the terms and conditions of that third-party site.
We do not conduct any diligence on any borrower or any Collateral. If you are a Lender, you agree to assume all risks associated with any Borrower or any Collateral, including any risk of actions taken by a lender or other party who are not using this Platform against your Borrower. Without limitation of the foregoing sentence, you agree to assume all risks associated with any Borrower or any Collateral in connection with a bankruptcy proceeding or other insolvency proceeding involving your Borrower.
CONDITIONS TO USE THE SITE
In order to utilize the Site, you may only do so by accepting the following conditions and, by doing so, you warrant and represent that the following are a true and accurate reflection of the basis on which you are using the Site:
a. Neither Residual Token nor its Representatives has provided you with any advice regarding whether utilizing the Site or purchasing Tokens from third parties are a suitable investment for you;
b. You have sufficient understanding of the functionality, usage, storage, transmission mechanisms and intricacies associated with cryptographic, such as Bitcoin and Ethereum, as well as blockchain-based software systems generally;
c. You will supply us with all information, documentation or copy documentation that we require in order for you to use the Site;
d. You have not supplied us with information which is inaccurate or misleading;
e. You will provide us with any additional information which may be reasonably required in order that we can fulfil our legal, regulatory and contractual obligations, including but not limited to any anti-money laundering obligation;
f. You will notify us promptly of any change to the information supplied by you to us;
g. You are of a sufficient age (if an individual) to legally obtain Tokens, and you are not aware of any other legal reason to prevent you from obtaining Tokens;
h. You are not obtaining or using Site for any illegal purpose, and will not use the Site for any illegal purpose;
i. You waive any right you may have / obtain to participate in a class action lawsuit or a class wide arbitration against any entity or individual involved with the usage of the Site;
j. Your acquisition Tokens from third parties or use the Site does not involve your purchase or receipt of shares, ownership or any equivalent in any existing or future public or private company, corporation or other entity in any jurisdiction;
k. You accept that you bear sole responsibility for determining if (i) the acquisition, the allocation, use or ownership of Token (ii) the potential appreciation or depreciation in the value of Token over time, if any, (iii) the sale and purchase of Token; and/or (iv) any other action or transaction related to Token has tax implications.
l. To the best of your knowledge, none of the Tokens that are stored in your Wallet and no transaction taken by you while using the Site will, have been are are derived from activity that is deemed criminal under any applicable laws concerning money laundering and related activities.
We may perform any of our obligations, and exercise any of the rights granted to us under these Terms, through a third-party. We may assign any or all our rights and obligations under these Terms to any third-party. You may not assign these Terms, or your rights and obligations hereunder, without Residual Token’s written consent. Any attempted transfer or assignment by you in violation hereof shall be null and void. These Terms shall be binding and inure to the benefit of the parties hereto, our successors, and permitted assigns.
If any clause or part of any clause of these Terms is found to be void, unenforceable or invalid, then it will be severed from these Terms, leaving the remainder in full force and effect, provided that the severance has not altered the basic nature of these Terms.
No single or partial exercise, or failure or delay in exercising any right, power or remedy by us shall constitute a waiver by us of, or impair or preclude any further exercise of, that or any right, power or remedy arising under these Terms or otherwise.
If any of the provisions in these Terms are found to be illegal, invalid or unenforceable by any court of competent jurisdiction, the remainder shall continue in full force and effect.
These Terms shall be governed by the laws of the State of Wyoming.
All disclaimers, indemnities and exclusions in these Terms shall survive termination of the Terms and shall continue to apply during any suspension or any period during which the Site is not available for you to use for any reason whatsoever.
These Terms and the documents referred to in them set out the entire agreement between you and us with respect to your use of the site, Residual Token and the services provided via the site and supersede any and all prior or contemporaneous representations, communications or agreements (written or oral) made between you or us.
The parties agree that any dispute or controversy arising out of or relating to this Agreement or the interpretation thereof, shall be settled by arbitration in accordance with the rules, then in effect, of the National Futures Association or, if the National Futures Association shall refuse jurisdiction, then in accordance with the rules, then in effect, of the American Arbitration Association; provided, however, that the power of the arbitrator shall be limited to interpreting this Agreement as written and the arbitrator shall state in writing his reasons for his award. Judgment upon any award made by the arbitrator may be entered in any court of competent jurisdiction. The applicable law will be the laws of the State of Wyoming.
With respect to all persons and entities, regardless of whether they have obtained or used the site for personal, commercial or other purposes, all disputes, controversies or claims must be brought in the parties’ individual capacity, and not as a plaintiff or class member in any purported class action, collective action or other representative proceeding. This waiver applies to class arbitration, and, unless we agree otherwise, the arbitrator may not consolidate more than one person’s claims. You agree that, by entering into this agreement, you and Residual Token are each waiving the right to a trial by jury or to participate in a class action, collective action, or other representative proceeding of any kind.
We support and endorse the notion that all people, everywhere, have the right to life, liberty, the pursuit of happiness, and control over their own assets. Where systems, products and processes exist such that individuals and entities can control their own stuff, and earn interest or borrow when they need or want to, then it is incumbent upon the next generation of product designers, programmers, engineers and business leaders to provide those capabilities. Technology and information should not be used solely to create an advantage for one entity over another, but rather should be applied towards the betterment of the human condition and experience. Enjoy the material above, and for the full transcript of our terms, conditions and loan agreement, please access ReserveLending today and get started on your road to financial freedom!
Although the material contained in this website was prepared based on information from public and private sources that Residual Token, Inc. d/b/a unFederalReserve believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and Residual Token, Inc. expressly disclaims any liability for the accuracy and completeness of information contained in this or any article.
This article, our website, social media posts and other public forum materials are distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. The information, opinions and views contained herein have not been tailored to the objectives of any one individual, are current only as of the date hereof and may be subject to change at any time without prior notice. Residual Token, Inc. does not have any obligation to provide revised opinions in the event of changed circumstances.
All investment strategies and investments involve risk of loss. Nothing contained in this website should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.
Any ideas or strategies discussed herein should not be undertaken by any individual without prior consultation with a finance, tax or legal professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal objectives, needs and risk tolerance. Residual Token, Inc. expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.