An asset-indexed escrow process is a financial arrangement where assets are used as collateral to secure a transaction or financial commitment. This process can be used in various scenarios, such as real estate transactions, financing arrangements, or tokenization projects. Here’s a general overview of the process:

Agreement Initiation:

Parties involved: The process typically involves three main parties – the asset owner (Party B), the escrow company (Party A), and a platform or issuer (Party C) responsible for tokenization or financial transactions.

Agreement Creation: Parties create a formal agreement outlining the terms and conditions of the escrow arrangement. This includes details of the assets involved, financing terms, profit distribution, and dispute resolution mechanisms.

Escrow Account Setup:

Party A establishes an escrow account to hold the assets in question.

Party B deposits a portion of the assets into the escrow account, often between %100+10-50% of the asset’s value, depending on the agreement.

Tokenization or Financial Transaction:

Party C, in collaboration with Token Issuers and Asset-Backed Tokens Platform partners, proceeds with the tokenization or financial transaction process. This may involve creating asset-backed tokens, drafting contracts, and preparing related documents.

Payment Schedule: Party A keeps track of the payment schedule agreed upon in the contract. This includes the principal and profit margin payments promised to investors.

Profit Distribution: The profit margin promised to investors by Party B is determined based on agreed-upon options, such as different financing provisions with specified percentages.

Asset Valuation:Asset Valuation is often calculated based on the market value of the assets at maturity.

Asset Transfer: Once the repayments of promised financing to investors are completed, the assets registered to Party B are transferred according to the terms specified in the contract. This transfer can occur either in a single transaction or in stages.

Fee Payments:Fees are paid to service providers (e.g., Asset Basket Global Platform) based on the financing amount of the asset price registered in Escrow.

Dispute Resolution:The agreement includes provisions for dispute resolution. Disputes that arise regarding the agreement can be settled through arbitration or litigation, as specified in the contract.

Full Agreement:The entire agreement constitutes the terms and conditions agreed upon by all parties involved in the escrow process.

Asset-indexed escrow arrangements are used to provide security and transparency in various financial transactions, especially when assets are involved.

The process ensures that assets are safeguarded and transferred according to the terms of the agreement, providing protection for all parties involved.

It’s essential to create a detailed and legally binding agreement to govern the escrow process effectively.

You can review detailed information about Escrow on our website;

You can view the sample of the Agreement on the Registration of Token Guarantee Assets to the Escrow Account at this link.