For information purposes only. Please consult a law practitioner for legal advice around interacting with Real World Assets on the Casten Protocol.
The legal setup for each pool mirrors the smart-contract structure and the real-world relationships between the parties. It is structured with two goals in mind:
a) Ensure that investors in the pool have the most protection possible giving them recourse. The source of truth is on-chain. b) For this purpose, each pool has a legal entity tied to it, special purpose vehicle or SPV. The SPV keeps the Asset Originator's business separate from the financing activity in the pool.
SPV A Special Purpose Vehicle (SPV) is an independent legal entities created for a specific objective, to isolate finacial risk in case the parent company goes bankrupt.