RociFi

RociFi is a decentralized credit market with non-transferable, blockchain-native credit scores designed to facilitate under-collateralized and capital-efficient lending. The RociFi protocol facilitates fixed term and rate loans with credit score-dependant LTVs. At its core, the protocol leverages on-chain data, machine learning and web3 risk management to effectively and profitably facilitate under-collateralized loans via the blockchain. RociFi consists of an on-chain lending protocol and off-chain credit scoring API.

Traditional Finance
One of the core functions of a modern banking is to loan money. Banks pool the wealth of a large number of savers and proceed to lend fractions of that pool to a diverse group of enterprising firms and/or individuals. The bank makes a profit and covers their expenses by charging borrowers more for loans than they pay depositors for keeping money in the bank.

This process of issuing loans confers significant benefits to borrowers, depositors and wider society. It reallocates capital from otherwise idle deposits to those who can use it in the pursuit of economic opportunity. Opportunity that would have otherwise been unattainable. A proportion of a borrower’s newly generated wealth is then returned to depositors in interest payments.

DeFi
The majority of lending protocols require a borrower to post an amount of collateral that exceeds the value of their loan. This incredibly popular product allows borrowers to leverage a position and provides depositors with a low risk return. However, requiring liquid collateral in excess of the value of a loan is not providing credit. It would be inconceivable to require a borrower taking a mortgage to give the bank an amount in cash in excess of the value of the loan.

RociFi
The RociFi protocol takes the traditional banking model of credit issuance and places it on chain. Just as a traditional bank would pool dollar deposits so RociFi allows a user to place a token (e.g. USDC) in a lending pool. From this pool a screened borrower is then eligible to take a USDC loan. Upon repayment the interest on this loan is shared immediately across all depositors according to their proportional ownership of that pool.