> ## Documentation Index
> Fetch the complete documentation index at: https://tonic-ai.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Securitization Workflow

> Complete securitization workflow from pool creation to ERC-721 token minting

## Overview

The Securitization Workflow enables financial institutions to bundle loans and bonds into structured finance products, create CDM-compliant securitization pools, notarize transactions on the blockchain, and mint ERC-721 tranche tokens for investors.

**Code Reference**: `app/services/securitization_service.py`, `app/api/securitization_routes.py`, `client/src/apps/securitization/SecuritizationWorkflow.tsx`

***

## Key Features

### Pool Creation

* **Asset Selection**: Select loans and bonds from your portfolio
* **Pool Configuration**: Define pool parameters and structure
* **CDM Compliance**: All pools are CDM-compliant
* **Auto-Generation**: Automatic pool structure generation

**Code Reference**: `app/services/securitization_service.py` (create\_securitization\_pool)

### Blockchain Notarization

* **MetaMask Integration**: Multi-party signing with MetaMask
* **Smart Contracts**: SecuritizationNotarization contract on Base network
* **Immutable Records**: Blockchain-based transaction records
* **CDM Events**: Notarization events stored as CDM events

**Code Reference**: `app/services/blockchain_service.py`, `app/services/notarization_service.py`

### Tranche Minting

* **ERC-721 Tokens**: Mint non-fungible tranche tokens
* **Tranche Structure**: Define seniority, interest rates, payment priority
* **Token Metadata**: Rich metadata for each tranche
* **Investor Distribution**: Distribute tokens to investors

**Code Reference**: `contracts/SecuritizationToken.sol`, `app/services/securitization_service.py`

### Payment Distribution

* **Payment Waterfall**: Automated payment distribution
* **Priority Rules**: Senior tranches paid first
* **Smart Contract Routing**: SecuritizationPaymentRouter contract
* **USDC Payments**: Payments in USDC stablecoin on Base network

**Code Reference**: `contracts/SecuritizationPaymentRouter.sol`, `app/services/securitization_service.py` (distribute\_payments)

***

## Workflow

### 1. Create Securitization Pool

1. **Select Assets**: Choose loans/bonds to include in pool
2. **Configure Pool**: Set pool name, description, parameters
3. **Define Tranches**: Create tranche structure (senior, mezzanine, equity)
4. **Review**: Review pool configuration
5. **Create**: Generate CDM-compliant securitization pool

### 2. Notarize Pool

1. **Connect Wallets**: All parties connect MetaMask wallets
2. **Review Terms**: Review securitization terms
3. **Sign**: Each party signs the notarization
4. **Submit**: Submit signatures to blockchain
5. **Confirm**: Receive blockchain transaction hash

### 3. Mint Tranche Tokens

1. **Select Tranche**: Choose tranche to mint
2. **Configure Token**: Set token metadata and properties
3. **Mint**: Deploy ERC-721 token contract
4. **Distribute**: Assign tokens to investors
5. **Track**: Monitor token ownership and transfers

### 4. Process Payments

1. **Receive Payments**: Collect payments from underlying assets
2. **Calculate Distribution**: Apply payment waterfall rules
3. **Route Payments**: Use smart contract for distribution
4. **Update Records**: Update payment history and CDM events

***

## CDM Compliance

### Securitization Models

All securitization data uses CDM models:

* **SecuritizationPool**: Pool structure and metadata
* **UnderlyingAsset**: Assets in the pool
* **Tranche**: Tranche definitions
* **PaymentWaterfall**: Payment distribution rules

**Code Reference**: `app/models/cdm.py` (SecuritizationPool, UnderlyingAsset, Tranche, PaymentWaterfall)

### CDM Events

All securitization actions generate CDM events:

* **SecuritizationCreation**: Pool creation event
* **SecuritizationNotarization**: Blockchain notarization event
* **TrancheMinting**: Token minting event
* **PaymentDistribution**: Payment distribution event

**Code Reference**: `app/models/cdm_events.py` (generate\_cdm\_securitization\_creation, generate\_cdm\_securitization\_notarization)

***

## Smart Contracts

### SecuritizationNotarization

**Location**: `contracts/SecuritizationNotarization.sol`

Notarizes securitization pools on the blockchain with multi-party signatures.

### SecuritizationToken (ERC-721)

**Location**: `contracts/SecuritizationToken.sol`

Mints non-fungible tranche tokens representing ownership in securitization pools.

### SecuritizationPaymentRouter

**Location**: `contracts/SecuritizationPaymentRouter.sol`

Routes payments according to waterfall rules defined in the securitization structure.

**Code Reference**: `contracts/` directory

***

## API Endpoints

<Endpoint method="POST" path="/api/securitization/pools" />

Create a new securitization pool.

<Endpoint method="GET" path="/api/securitization/pools" />

List all securitization pools.

<Endpoint method="GET" path="/api/securitization/pools/{pool_id}" />

Get detailed pool information.

<Endpoint method="POST" path="/api/securitization/pools/{pool_id}/notarize" />

Notarize a securitization pool on the blockchain.

<Endpoint method="POST" path="/api/securitization/pools/{pool_id}/tranches/{tranche_id}/mint" />

Mint ERC-721 tokens for a tranche.

<Endpoint method="POST" path="/api/securitization/pools/{pool_id}/payments/distribute" />

Distribute payments according to waterfall rules.

**Code Reference**: `app/api/securitization_routes.py`

***

## Configuration

### Environment Variables

<ParamField body="X402_NETWORK_RPC_URL" type="string">
  Base network RPC URL. Mainnet: `https://mainnet.base.org`, Sepolia: `https://sepolia.base.org`
</ParamField>

<ParamField body="SECURITIZATION_NOTARIZATION_CONTRACT" type="string">
  SecuritizationNotarization contract address (auto-deployed if empty)
</ParamField>

<ParamField body="SECURITIZATION_TOKEN_CONTRACT" type="string">
  SecuritizationToken contract address (auto-deployed if empty)
</ParamField>

<ParamField body="SECURITIZATION_PAYMENT_ROUTER_CONTRACT" type="string">
  SecuritizationPaymentRouter contract address (auto-deployed if empty)
</ParamField>

<ParamField body="USDC_TOKEN_ADDRESS" type="string">
  USDC token address on Base network. Mainnet: `0x833589fCD6eDb6E08f4c7C32D4f71b54bdA02913`
</ParamField>

**Setup Guide**: See [MetaMask Setup Guide](/guides/metamask-setup)

***

## User Interface

### Securitization Workflow

**Location**: `client/src/apps/securitization/SecuritizationWorkflow.tsx`

**Features**:

* **Asset Selection Table**: Select loans/bonds for pool
* **Pool Configuration Panel**: Configure pool parameters
* **Tranche Structure Editor**: Define tranche structure
* **Notarization Interface**: Multi-party signing interface
* **Token Minting Interface**: Mint and distribute tokens
* **Payment Dashboard**: Monitor payment distributions

**Access**: Navigate to "Securitization" in the sidebar

***

## Best Practices

1. **Asset Selection**: Choose assets with similar risk profiles
2. **Tranche Structure**: Design clear seniority and payment priority
3. **Documentation**: Maintain complete CDM event trail
4. **Compliance**: Ensure regulatory filing requirements are met
5. **Testing**: Test on Base Sepolia testnet (or a local Hardhat node: `npm run node` and `npm run deploy:localhost` in `contracts/`) before mainnet deployment

***

## Additional Resources

* [MetaMask Setup Guide](/guides/metamask-setup)
* [Configuration Guide](/getting-started/configuration#blockchain--smart-contract-configuration)
* [CDM Compliance](/compliance/cdm-compliance)

***

**Last Updated**: 2026-01-14\
**Code Reference**: `app/services/securitization_service.py`, `app/api/securitization_routes.py`, `client/src/apps/securitization/SecuritizationWorkflow.tsx`