Mortpool

Problem Statement

Mortpool revolutionizes real estate financing by connecting borrowers directly with liquidity providers through smart contracts, eliminating traditional banking overhead and offering market-driven rates typically 30-50% lower than conventional mortgages worldwide.The Problem: Traditional mortgages burden borrowers with high interest rates ranging from 6-8% APR in developed markets to 10-15% or higher in emerging markets due to banking infrastructure costs, regulatory overhead, and profit margins. Meanwhile, savers earn minimal yields on their deposits while banks profit from the spread. This inefficient system leaves both sides underserved globally, making homeownership increasingly difficult regardless of location.The Solution: Mortpool creates a peer-to-pool lending marketplace where borrowers can tokenize their properties as NFTs and secure competitive mortgages with significantly reduced rates and just 10-20% down payment. Liquidity providers deposit stablecoins and earn sustainable yields (typically 50-70% of the borrower rate) backed by real-world assets - significantly better than traditional savings while diversifying into property-backed lending. The protocol adapts to any market, always offering better rates than local banks by removing intermediaries.How It Works:Properties are tokenized as ERC-721 NFTs with complete metadata (address, value, images)Borrowers apply for mortgages through smart contracts with instant approval based on property value and down paymentEach monthly payment automatically increases their on-chain ownership percentage, making equity building transparent and gamifiedLiquidity providers earn yield distributed from mortgage interest payments, with returns proportional to pool utilizationA 2% insurance reserve protects against defaults, creating sustainable risk management across all marketsUpon completion of all payments, full property ownership transfers automatically to the borrowerKey Innovations: Incremental Ownership Tracking - Unlike traditional mortgages where ownership is binary (bank owns it until final payment), Mortpool shows borrowers their growing equity percentage (0-100%) with each payment, creating engagement and transparency. Borrowers can see exactly how much of their home they own at any moment.Market-Driven Rates - Interest rates adjust based on pool utilization and supply/demand dynamics, creating efficient pricing without arbitrary bank policies. Higher pool utilization leads to slightly higher rates to attract more liquidity, while lower utilization offers better borrower rates to increase loan demand.Insurance Pool Mechanism - 2% of total liquidity reserved to cover defaults, protecting LPs while keeping rates competitive globally. This creates a sustainable safety net that doesn't require the massive overhead of traditional mortgage insurance.Complete Transparency - All mortgage terms, payment history, ownership transfers, and rate calculations are immutably recorded on-chain. Anyone can verify the fairness of rates and terms at any time.Global Accessibility - By operating on blockchain infrastructure, Mortpool can serve borrowers in any country, offering rates 30-50% better than their local banks regardless of regional economic conditions.The Impact: By removing intermediaries and reducing overhead, Mortpool makes homeownership more accessible worldwide while providing stable, asset-backed yields to liquidity providers. The platform handles the complete mortgage lifecycle: property listing, application processing, monthly payments, default management, and ownership transfer, all enforced by smart contracts with minimal human intervention.This creates a win-win scenario where borrowers save significantly on interest over their loan term (potentially tens of thousands in developed markets, even more in emerging markets), LPs earn competitive returns on real-world assets, and the entire process is transparent, efficient, and trustless. Whether you're buying a home in São Paulo, New York, or Mumbai, Mortpool offers better rates than your local banks.Future Vision - Beyond Real Estate: While Mortpool currently focuses on real estate mortgages, the underlying architecture is designed to scale to any high-value asset class. The core mechanics of tokenization, liquidity pooling, incremental ownership tracking, and insurance reserves can be adapted to create lending markets for vehicles and equipment (cars, boats, heavy machinery), luxury assets (watches, art, collectibles), business assets (commercial equipment, inventory), and even digital assets (domain names, NFT collections, intellectual property). This makes Mortpool a foundation for a broader decentralized financing ecosystem that can democratize access to credit for any valuable asset, not just property.

Solution

Mortpool is built entirely on Scaffold-ETH 2, leveraging its integrated development environment for rapid hackathon development with hot-reload contract deployment and type-safe frontend interactions.Smart Contract Architecture (Solidity + Hardhat): Three-contract modular system using OpenZeppelin libraries.PropertyNFT - ERC-721 for tokenized real estate with metadata (address, valuation, images). Owned by MortgageManager for lifecycle control.MortgagePool - Manages stablecoin deposits/withdrawals and yield distribution. Tracks total liquidity, active loans, and maintains 2% insurance reserve. Interest flows through here to LPs based on their pool share.MortgageManager - Core orchestration handling complete mortgage lifecycle. Creates mortgage structs, calculates interest/principal splits, updates ownership incrementally with each payment, enforces defaults after 90 days of missed payments.Key Technical Decisions: Incremental Ownership Model - Each payment increases ownership by (payment_amount / total_property_value * 100). Simplified vs traditional amortization but perfect for demonstrating equity building visually. This was the trickiest part - balancing simplicity with fairness.BigInt Precision - All calculations use uint256 to avoid floating-point errors. Percentages stored as integers (4.5% = 450) for precise financial math.Insurance Pool Math - 2% reserve protects against defaults. Formula ensures (totalLiquidity - insuranceReserve - activeBorrowedAmount) is always available for LP withdrawals, preventing bank runs.Frontend (Next.js 14 + TypeScript + RainbowKit): Five pages: Home, Properties, Liquidity Pool, Dashboard, Block Explorer. Built with Next.js App Router and Tailwind/DaisyUI.Scaffold-ETH's Magic - Running "yarn deploy" auto-generates TypeScript types from Solidity contracts, giving end-to-end type safety. The frontend knows every function signature without manual typing.Real-time updates via Wagmi's automatic cache invalidation. Make a payment, ownership percentage updates instantly without refresh.Hackaton Optimizations: Simulated Oracles - Property valuations hardcoded for MVP. Production would integrate Chainlink for real-time property values from APIs.Notable Hack: Payment scheduling uses simple block.timestamp checks instead of Chainlink Keepers automation. Borrowers can pay anytime, but late fees accrue after 30 days.Why Scaffold-ETH 2: Eliminated 8-10 hours of boilerplate setup. No configuring Hardhat, no wiring wallet connections, no manual type definitions. Just write contracts and UI. The hot-reload loop and automatic type generation let us iterate faster than any other framework.Production Roadmap: With more time we'd add: utilization-based dynamic rates (like Aave), Chainlink credit scoring integration, Superfluid payment streams, legal deed tokenization, and L2 deployment for lower gas costs.