CALIBER
Collateral Architecture for Legally Interoperable, Bankruptcy-remote, Enforceable Rights. The legal and tokenization layer that makes physical GPU hardware programmable as on-chain collateral.
DeFi can't touch physical assets without a legal bridge.
GPU hardware sits in data centers — physical, depreciating, and governed by real-world law. Smart contracts alone can't enforce a lien on a rack of H100s. If a borrower defaults, you need legal recourse, not just an oracle.
Traditional securitization solves this for mortgages and auto loans, but it's slow, expensive, and opaque. CALIBER takes the same legal principles and makes them on-chain, transparent, and enforceable.
Four layers from hardware to on-chain rights
Physical Asset
GPU hardware (H100s, A100s, etc.) sits in a third-party data center under a UCC Section 7 bailment agreement. The data center is the bailee — they hold the hardware but don't own it. This creates a documented chain of custody.
SPV Isolation
Each loan is wrapped in a bankruptcy-remote Special Purpose Vehicle. If the borrower's business fails, the collateral is legally isolated — creditors can't reach it. The SPV owns the hardware, not the borrower.
ERC-721 Token
The SPV's rights are tokenized as an ERC-721 NFT on Ethereum. This NFT represents enforceable ownership of the underlying hardware — not a JPEG, but a legal claim backed by UCC filings and bailment receipts.
Protocol Integration
The ERC-721 token plugs into USD.AI's lending contracts. Smart contracts manage loan terms, interest accrual, and liquidation triggers — all backed by the legal enforceability of the layers below.
Why CALIBER works where tokenization alone doesn't
Bankruptcy-remote
SPV isolation means borrower insolvency doesn't affect collateral. Lenders have a direct, enforceable claim on the hardware through the SPV structure.
UCC enforceability
Section 7 bailment creates a recognized legal framework for holding physical goods. Not a crypto experiment — a centuries-old commercial law applied to GPUs.
On-chain transparency
Every collateral position is visible on Ethereum. ERC-721 tokens carry metadata linking to independent appraisals, UCC filings, and bailment documentation.
Independent appraisals
Hardware is valued by third-party appraisers, not price oracles. Depreciation schedules and market comps replace volatile price feeds.
Structured liquidation
Default doesn't mean fire sales. The SPV enables orderly disposition — hardware can be remarketed, re-leased, or sold through established channels.
Off-balance-sheet
SPV structure keeps collateral off the borrower's balance sheet. Clean accounting treatment enables institutional borrowers to participate.
CALIBER vs. existing collateral models
| DeFi (Crypto-Only) | TradFi Securitization | CALIBER (USD.AI) | |
|---|---|---|---|
| Collateral type | Tokens only | Physical, but off-chain | Physical hardware, on-chain rights |
| Legal enforceability | Smart contract only | Full legal stack | Full legal stack + smart contracts |
| Bankruptcy protection | None | SPV-based | SPV-based + on-chain verification |
| Transparency | On-chain | Quarterly reports | Real-time on-chain + legal docs |
| Valuation | Price oracles | Periodic appraisals | Independent appraisals, no oracles |
| Settlement | Instant (but volatile) | Weeks to months | Structured, orderly disposition |
Read the full CALIBER specification
Legal architecture, tokenization flows, and SPV structure — documented in detail in the USD.AI protocol docs.