3.2.1. Introduction

The guarantee fund is a central instrument to the Nash21 protocol. The Guarantee Fund (GF) provides the necessary liquidity to carry out the management actions of collection and payment of the monthly rents, and acts as a guarantor for all of the tokenised contracts. The guarantee fund also takes care of generating profitability from the investment and efficient use of the capital it holds as a guarantee.

$$FG (Fondo de Garantía) = CLA + FR$$

Both the composition and size and amount of the guarantee fund are dynamic and organic, so its composition will vary mainly based on the quantity of tokenised contracts, potential capital increases and, to a lesser extent, the level of non-payments at any given moment. To gain an in-depth understanding of the logic of the guarantee fund, it is first necessary to analyse each of its components and functionalities.

Glossary of terms.

Término	Descripción
GF	Guarantee Fund
RF	Reserve Fund
LCA	Liquid Capital for Administration
IC	Initial Capital for the Guarantee Fund
MCR	Minimum Capital Risk
RPRF	Revenue from the Profit of the Protocol allocated to the Reserve Fund
YRF	Yield Reserve Fund
NP	Value of non-payments
%NP	Percentage of non-payments over number of contracts
RNP	Recovery of non-payments