Absurd Finance aims to bridge the gap in the credit industry faced by the newer generations. Traditional financial institutions, influenced by central bank policies and global uncertainties, are hesitant to extend credit to many individuals, particularly those without a robust credit history. This challenge is amplified for web3 natives by the lack of a web3 native loan originator. Absurd Finance plans to address this by integrating open banking with on-chain data, thus assessing borrowing power more accurately. Our innovative approach will provide uncollateralized revolving credit lines to vetted and private borrowers, linked directly to a credit card. This would position Absurd Finance as the pioneer in offering the first credit powered by a fully on-chain backend.
An essential aspect of Absurd Finance innovative approach to underwriting is the potential integration of zero-knowledge proofs within its hybrid credit scoring oracle.
In the context of hybrid credit scoring, this technology will serve as a powerful tool to ensure privacy and security: borrowers could prove their score generated off-chain in a privacy-preserving way to the smart contracts, thus eliminating the need for a centralised third party to actually open credit lines on behalf of them.
By combining open banking with on-chain data, and implementing zero-knowledge proofs, Absurd Finance could create a lending environment that's not only inclusive and accurate but also respectful of individual privacy and security. It's a forward-thinking approach that aligns perfectly with the demands of modern finance in a digital world.
Category
Zero-Knowledge Proofs (ZKP)
Timeline
Months 1-2: Integration of open banking and on-chain data systems. Initial testing and vetting algorithms. Development of the analysis algorithm, including identification of wallet activity, recurrent income, HODL'd assets, gambling attitude, and interactions with sanctioned wallets. Implementation of zero-knowledge technology to publish the revolving credit line amount on-chain.
Months 3-4: Launch of the uncollateralized revolving credit lines system. Beta testing with a limited user base.
Months 5-6: Official rollout of the Absurd Finance credit products and integration into major lending protocols. Continuous feedback and system optimization.
Project Plan
Strategy is rooted in the integration of open banking and on-chain data. In the initial phase, our team will focus on developing algorithms that accurately determine borrowing power.
Our approach integrates open banking data with a borrower's on-chain wallet activity to generate a comprehensive financial profile. Traditional banking data provides insight into an individual's financial habits and commitments. However, to address the potential issue of selective data revelation on-chain (e.g., only showing income and not debts), our system focuses on wallets with a rich transactional history. This ensures the wallet is representative of the user's genuine financial activity. An inactive wallet or one with sparse transactions is deemed unrepresentative. The system also red-flags interactions with untrusted wallets, ensuring the credibility and security of our credit assessment. Once the credit line amount is determined, we use zero-knowledge proofs to publish it on-chain, allowing lending protocols to issue credit without compromising user privacy.
We'll then proceed to the beta testing phase, offering uncollateralized credit lines to a select group of vetted borrowers. Feedback from this phase will be crucial in refining our product. The final two months will see the launch of the Absurd Finance credit card, complete with a fully on-chain backend. In the long term, we aim to expand our offerings and establish Absurd Finance as a trusted name in the web3 credit industry, making credit access seamless and fair for everyone.
Project Impact
The implications of our project are profound. Absurd Finance directly addresses the unfolding credit crisis, particularly the challenges faced by younger generations such as GenZ. By offering a web3 solution to credit access, we aim to democratize financial resources. This will not only empower individuals who have been historically left out of the credit system but will also promote economic growth by ensuring people can make purchases and investments.
Our credit scoring system is set to revolutionize the DeFi lending space, making it more capital-efficient and bringing real utility to everyday users. By offering a comprehensive and private credit assessment, we ensure borrowers can access funds commensurate with their financial standing without compromising their privacy. This system will be particularly beneficial for users who want to leverage their on-chain assets and seek credit opportunities within the blockchain ecosystem without resorting to traditional banking. The web3 community will benefit from a native solution that integrates traditional financial needs with blockchain technology, paving the way for more innovations in the space.
Team Information
DuckTape - Product: An expert in product development with an acute understanding of financial products, DuckTape's vision is driving the project's mission to blend traditional and blockchain-based credit systems.
OxMarco - Engineering: 0xMarco's experience in blockchain development and his foundational work on DeFi protocols are key to developing the system's technical aspects. His initial work on the Credit Bureau using cross-chain identity provides a strong foundation for this endeavor.
0xGidone - Finance and Underwriting: Holding a Ph.D. in Mathematics and boasting a rich background in traditional banking, DrMadScientist brings unparalleled expertise to our credit scoring initiative. His experience spans roles in major Swiss banks, ensuring our underwriting processes are world-class. His financial math knowledge further positions us to understand and integrate best practices from the traditional banking world.
Project Description
Absurd Finance aims to bridge the gap in the credit industry faced by the newer generations. Traditional financial institutions, influenced by central bank policies and global uncertainties, are hesitant to extend credit to many individuals, particularly those without a robust credit history. This challenge is amplified for web3 natives by the lack of a web3 native loan originator. Absurd Finance plans to address this by integrating open banking with on-chain data, thus assessing borrowing power more accurately. Our innovative approach will provide uncollateralized revolving credit lines to vetted and private borrowers, linked directly to a credit card. This would position Absurd Finance as the pioneer in offering the first credit powered by a fully on-chain backend.
An essential aspect of Absurd Finance innovative approach to underwriting is the potential integration of zero-knowledge proofs within its hybrid credit scoring oracle.
In the context of hybrid credit scoring, this technology will serve as a powerful tool to ensure privacy and security: borrowers could prove their score generated off-chain in a privacy-preserving way to the smart contracts, thus eliminating the need for a centralised third party to actually open credit lines on behalf of them.
By combining open banking with on-chain data, and implementing zero-knowledge proofs, Absurd Finance could create a lending environment that's not only inclusive and accurate but also respectful of individual privacy and security. It's a forward-thinking approach that aligns perfectly with the demands of modern finance in a digital world.
Category
Zero-Knowledge Proofs (ZKP)
Timeline
Project Plan
Strategy is rooted in the integration of open banking and on-chain data. In the initial phase, our team will focus on developing algorithms that accurately determine borrowing power.
Our approach integrates open banking data with a borrower's on-chain wallet activity to generate a comprehensive financial profile. Traditional banking data provides insight into an individual's financial habits and commitments. However, to address the potential issue of selective data revelation on-chain (e.g., only showing income and not debts), our system focuses on wallets with a rich transactional history. This ensures the wallet is representative of the user's genuine financial activity. An inactive wallet or one with sparse transactions is deemed unrepresentative. The system also red-flags interactions with untrusted wallets, ensuring the credibility and security of our credit assessment. Once the credit line amount is determined, we use zero-knowledge proofs to publish it on-chain, allowing lending protocols to issue credit without compromising user privacy.
We'll then proceed to the beta testing phase, offering uncollateralized credit lines to a select group of vetted borrowers. Feedback from this phase will be crucial in refining our product. The final two months will see the launch of the Absurd Finance credit card, complete with a fully on-chain backend. In the long term, we aim to expand our offerings and establish Absurd Finance as a trusted name in the web3 credit industry, making credit access seamless and fair for everyone.
Project Impact
The implications of our project are profound. Absurd Finance directly addresses the unfolding credit crisis, particularly the challenges faced by younger generations such as GenZ. By offering a web3 solution to credit access, we aim to democratize financial resources. This will not only empower individuals who have been historically left out of the credit system but will also promote economic growth by ensuring people can make purchases and investments.
Our credit scoring system is set to revolutionize the DeFi lending space, making it more capital-efficient and bringing real utility to everyday users. By offering a comprehensive and private credit assessment, we ensure borrowers can access funds commensurate with their financial standing without compromising their privacy. This system will be particularly beneficial for users who want to leverage their on-chain assets and seek credit opportunities within the blockchain ecosystem without resorting to traditional banking. The web3 community will benefit from a native solution that integrates traditional financial needs with blockchain technology, paving the way for more innovations in the space.
Team Information
Point of Contact
tg: @gintarq | discord: @ducktape | email: gintaras@absurd.finance
Previous Work
https://keyring.network/ a zk-powered KYC and KYB
https://ithil.fi/ a financial primitive building protocol, the OpenZeppelin of DeFi
[Credit Bureau](https://github.com/Absurd-finance/credit-bureau) a cross-chain credit bureau
Uniswap V3 on-chain oracle
Additional Information
litepaper.pdf
Agreement