RociFi Launches Under-collateralized Credit Protocol On Polygon

The under-collateralized credit protocol on Polygon from RociFi Labs is the 1st DeFi protocol where retail borrowers can take advantage of their DeFi transaction history and Web3 reputation in order to take loans with collateral amounts smaller than loan principal. RociFi is unlocking capital efficiency for borrowers which will help DeFi cross the chasm into mass adoption.

RociFi for Borrowers

Borrowers on RociFi access fixed-rate, fixed-term 30-day USDC loans with WETH as collateral.

RociFi is the 1st DeFi protocol where borrowers can take loans with collateral value less than 100% of loan principal pseudo-anonymously and permissionlessly.

RociFi does not require any KYC nor any piece of personal information from its borrowers. Loan issuing process requires only a crypto wallet and a few clicks. Learn more about the protocol’s credit scoring methodology here.

Read here about how rates for borrowers are set up.

RociFi for Lenders

Lenders on RociFi can earn high and stable APY on USDC by depositing capital into one of three lending pools based upon their risk tolerance.

Unlike other DeFi protocols providing under-collateralized loans, RociFi doesn’t require deposit lockup, i.e. lenders can withdraw at any time without restrictions, as long as there’s money in the pool. Otherwise, depositors may sell their deposit tokens (debt tokens) on supported AMMs to exit their position.

Detailed analysis about how Lenders’ earnings are calculated can be read here.

Read more on how RociFi manages default risk here and here.

NFCS

In order to borrow on RociFi, users must mint their Non-fungible Credit Score (NFCS) token and receive a credit score. NFCS operates as a credit, reputation, and trust credential that neatly classifies user’s on-chain behavior into an easily interpretable scale from 1–10; with 1 being the most creditworthy and 10 being the least.

Here are a few directions on how NFCS can be used by DeFi protocols as a cross-chain interoperable NFT-based identity solution:

• Enabling under-collateralized loans
• Protecting from fraud and scam
• Using NFCS-based reputation for Sybil resistance in DAO elections
• Balancing DAO voting power according to NFCS reputation
• Prioritizing airdrops and waitlists to quality users

Nearly 15000 NFCS have been minted during three months of RociFi’s Kovan Testnet.

To learn more about NFCS, read here.

Credit Score

RociFi’s credit scoring process analyzes four components:

• Fraud Database: Borrower address(es) are scanned through our DB of hundreds of thousands of known fraudulent actors, e.g. Phishing, Hacks, Scams etc.
• Fraud Score: Borrower address(es) scored as the probability that they are in fact fraudulent, but haven’t been flagged yet. 1 is the lowest risk and 10 is the highest.
• DID/Web3 Score: Borrower address(es) are scored for high reputation and monetary value. Each address is assigned a Rep Score where 1 is the best and 10 is the worst.
• Credit Score: Borrower address(es) scored as the probability that they will default on the loan. 1 is the lowest risk and 10 is the highest.

The protocol’s scoring process can be likened to a tripod with 3 equally important legs:

Credit risk — the borrower is able to repay the loan, i.e. creditworthiness

Fraud risk — the borrower is willing to repay the loan, i.e. trustworthiness

Reputation risk — the borrower has something to lose in the event of failing to repay the loan, i.e. social recourse

All three legs – credit, reputation, and trust – are needed to effectively and safely issue under-collateralized credit. An over-weighting to one leg like reputation fails over the long-term given reputation doesn’t matter when a borrower goes insolvent, e.g. Celsius and 3AC.

Credit Market

RociFi’s Credit Market is organized into 3 pools:

Pool 1 – under-collateralized 30-day USDC loans with 71% collateral requirement.

Target borrowers: Institutions, DAOs, Accounts with valuable follower based on Cyberconnect and credit scores lower than “3”.

**Pool 2 **- under-collateralized 30-day USDC loans with 85% collateral requirement.

Target borrowers: Anonymous borrowers with credit scores lower than “6”.

Pool 3 – over-collateralized 30-day USDC loans with max LTV of 90%.

Target borrowers: Anonymous borrowers with credit scores “7” to “10”.

Borrowers are auto-routed to the corresponding pools according to their Credit Score.

Limits

At launch, in order to reduce the total risk from issuing unsecured loans, the loan amounts across protocol will be limited to 500 USDC per loan per NFCS.

Also, the protocol will have limits on deposit and borrow not to exceed 100,000 USDC.

If you want to borrow bigger amounts, join the waitlist for borrowers here!

To sign-up in the waitlist for the large amount lenders click here.

Security

The RociFi protocol has been audited by Chainsulting and Certik.

More information can be found here about our security measures.

In order to avoid your account being phished please ensure that you always access links only from the verified domains – roci.fi and rociapi.com!

Feedback

If you have any questions or comments, please reach out to the RociFi team on Discord!

Join our Discord: http://discord.gg/tGgKkSqHZz

Follow us on Twitter: https://twitter.com/rocifi

Join us on Telegram: http://t.me/RociFi