Default risk of the borrower

Default risk from the borrower (asset holder):

Low sunk cost compared to asset value (because the collateral asset are relatively undervalued by appraisers/ lenders to form an over-collateralization).

After default, the collateral asset will first be liquidated via auction among appraisers/ lenders of this DNP contract. Appraisers/ lenders would have the first priority to get the asset at a decent price to get excess returns.

If none of the appraisers/ lenders purchase the collateral assets, the assets will be sold on DNP and other partner platforms at the same time. The selling proceeds will be distributed to appraisers/ lenders and borrower proportionally.