2.2.5. Loan Default

Loan default occurs when a borrower fails to pay back a debt according to the initial agreement. This means that successive payments have been missed over the course of 2 months. In this case, the NFT collateral needs to be sold, which will proceed according to a three-step process. The NFT will be auctioned off as a whole, with the minimum sale price being slightly higher than the loan value. If this fails, the lender will receive compensation from the TrustNFT Insurance pool.