Pawn Shop

It is well known that luxury assets are often related to assets pawns and collateralization. Traditionally the way of asking for a collateralized loan in a pawn shop is to deposit the real asset physically in order to fully collateralize the loan.

With Luxit this same process can be moved into the digital world. Having tokens that correctly and undoubtedly represent ownership of underlying valuable assets, users can use their tokens to ask for collateralized loans.

The rules that govern traditional pawn shops will be the same that Luxit will apply to this digital pawn shop:

• Collateral must be higher than the loan.

• Liquidations will take place in case of a drastic price change in the collateralized assets.

• High margins must be used in order to reduce liquidation risk.