[DOC] Creating a decentralized Score Credit for users in P2P lending market

[bbucciarati]

Type of Proposal

• [X ] Feature Request (e.g. functionality)

• [X ] Economic Model

• Underlying Technology (e.g. performance)

• Application Development

• Others

Background

P2P lending will be at the core of the upcoming DeFi storm, for the first time in history people will be able to allocate efficiently financial resources without the need of a central institution, having the ability to lend and borrow at optimal rate based on real time market data. Key point is the creation of a score system in order to better evaluate risk, rewarding virtuous users and penalizing less reliable ones.

Describe The Proposal (No more than 50 words)

The creation of a score system to rank users and risks in the P2P lending market, rewarding reliable ones with better conditions and penalizing unreliable ones with worst conditions or eventually excluding them from the market

Business Model (Optional for underlying technology)

When entering the market users start with a score of "0" (zero) points and are member of TOP array.
When borrowing from market they agree upon TIME, AMOUNT, INTEREST, TYPE OF ASSET (last one do not prevent to settle liabilities in other currency if agreed by peers).
At given time user will repay debt, if not or partially system will give negative REP based on % of amount not repaid (i.e. 10% not repaid equals -1, 20% equals -2 .. and so on).
Users under certain score will be put inside a lower ARRAY having access to "worst" borrowing conditions like higher interest or less duration (users in last ARRAY can't borrow).
Negative score will progress till debt is not fully repaid (i.e. extra -0.1 per day).
Users can get positive REP if stay in line with original contract conditions but can't have more the "0" (zero) points.
Users can also buy positive REP using fiat/crypto assets but only AFTER their debts have been repaid. Payment for positive REP will add to an insurance fund that cover lenders losses in proportion of their assets weight in lending system.

Implementation Steps (Optional for economic model)

After the creation of the market data were every actor start from same conditions a discover mechanism will be in act so new participants can choose optimal risk / reward for allocating their assets.

Expected Outcome

A better and more efficient P2P lending market that penalize unreliable peers but also give them the possibility to recover.

Timetable (Optional)
Estimate the timetable of your plan.

Implementation Steps	Time Consuming
step 1	e.g. one month
step 2	……
……	……
Total duration	e.g. one year

Additional Context (Optional)
Add any other context about the proposal here.

Contact Information

[email protected] OR [email protected]

[NicolaFrena]

Great job! It's what we need

[AlexTheLargeXL]

Very good idea, people need to know were are going their money!
Maybe bonus points will be paid in KCS?