When dealing with real world assets the enforcement varies depending on the asset. To make the process programmable what is needed is a mechanism that separates the off-chain enforcement out from the onchain liquidations.
Consider someone who has tokenized real estate, for instance Realt.co allows their investors to hold their property fractions in the form of ERC20 tokens. It can be any real world asset with a suitable structure around it and represented in the form of ERC20 tokens.
The theory here is the investor may withdraw their shares in a tokenized format, find a buyer of their own accord outside the platform and cash out of the illiquid project.
Being an ERC20, these tokens are freely exchanged, however they still need to be brought back into the platform in order to be recognized as ownership of the underlying shares. For that KYC/AML would be performed as necessary.
The incentives to a LP here are as follows:
Fees from the conversion.
Their belief in the value of the underlying collateral; if the underlying shares are for a quality asset such as ownership of FB, Tesla stocks etc or a quality real estate, then an astute investor would be happy to make fees by providing liquidity against them.
Beyond that if we can incentivize them via a liquidity mining process by issue of governance tokens (OPEN) then it becomes even more lucrative.
The liquidity mining however has to incentivize not just liquidity but also long term liquidity lock ups. If you are a LP for a property mortgage fund in Melbourne or Singapore, then you would need to lock up your liquidity for a certain amount of time in order to farm OPEN tokens.
This mechanism creates effective on-chain liquidity for off-chain assets.
Anyone who owns the tokenized shares, or property fractions, can now approach the minter and mint the required stable coin against it.