Cartesis Finance System Business Objects

Cartesi Finance is a system built upon the Cartesi Rollups framework, designed to facilitate decentralized finance (DeFi) applications with complex computational requirements. Its business objects, the core entities that represent and manage financial operations within the system, are critical to understanding how Cartesi Finance operates and its potential for innovation.

One of the fundamental business objects is the Loan. A Loan represents a financial agreement between a lender and a borrower. Crucially, Cartesi Finance can support Loans with highly customized terms and conditions. This customization is enabled by the Cartesi Rollups technology, allowing for complex logic to be executed off-chain, reducing gas costs and enabling functionalities that are impractical on the Ethereum mainnet alone. Loan objects contain attributes such as the loan amount, interest rate (which can be variable and based on complex formulas), repayment schedule, collateral type and value, and default conditions. Smart contracts manage the state of the loan, tracking payments, interest accrual, and potential liquidation events.

Collateral is another essential business object. In Cartesi Finance, Collateral can take various forms, including standard ERC-20 tokens, NFTs representing real-world assets (RWAs), or even more complex, synthetic assets derived from other DeFi protocols. The value and type of collateral are defined within the Loan object, but the Collateral object itself tracks its location (e.g., locked in a smart contract), current market value (potentially determined using off-chain oracles and processed by the Cartesi Machine), and liquidation parameters. This allows for sophisticated collateral management strategies, including automated liquidation based on real-time price feeds and complex risk assessments.

Interest Rate Models are themselves business objects, representing the algorithms that determine the interest rate applied to a Loan. These models can range from simple fixed-rate structures to complex, dynamically adjusted rates based on market conditions, borrower credit scores (potentially assessed off-chain and brought on-chain via Cartesi Rollups), or other relevant factors. This allows Cartesi Finance to implement sophisticated and flexible interest rate mechanisms that are simply not feasible on-chain due to computational limitations.

Payment Schedules detail the schedule of repayments for a Loan. Unlike simple, periodic repayment schedules, Cartesi Finance can support highly customized schedules that factor in various conditions, such as borrower income, seasonal fluctuations in revenue, or other external factors. This flexibility is a key advantage of using Cartesi Rollups, enabling tailored financial products that better meet the needs of specific borrowers and lenders.

Finally, Liquidation Strategies represent the procedures for liquidating collateral in the event of a borrower default. These strategies can be highly sophisticated, taking into account market conditions, the type of collateral, and the specific terms of the Loan. The Cartesi Machine can simulate different liquidation scenarios off-chain to determine the optimal strategy for maximizing recovery for the lender. This minimizes losses and ensures the stability of the platform.

These business objects, enabled by the Cartesi Rollups technology, allow Cartesi Finance to offer more complex and customized DeFi products than are typically available on Ethereum. The ability to perform complex computations off-chain and bring the results on-chain allows for sophisticated risk management, tailored loan structures, and innovative financial instruments, potentially bridging the gap between traditional finance and the decentralized world.