Autonomous Lending Organization on Ethereum with Credit Scoring
Publication Date
1-1-2023
Document Type
Conference Proceeding
Publication Title
2023 Silicon Valley Cybersecurity Conference, SVCC 2023
DOI
10.1109/SVCC56964.2023.10164922
Abstract
We propose the Autonomous Lending Organization on Ethereum (ALOE) system, which enables unsecured borrowing of funds on Ethereum. We incorporate a credit scoring approach that extends in the DeFi world the one that is used by traditional banks in order to quantify the risk of a borrower defaulting on a loan. As part of the loan process, first, we have a registration phase, where a notary verifies the real identity of a borrower and delegates to a set of auditors the task of storing a share of the real identity of a borrower to an Ethereum account while preserving anonymity. In the next phase, the Credit Bureau Smart Contract connects lenders to borrowers and updates credit scores. We automatically compute and update credit scores on-chain using the k-nearest neighbors algorithm.
Keywords
cold start problem, Credit scores, Decentralized Autonomous Organization, Decentralized Finance, Loan, k-nearest neighbors algorithm, smart contracts
Department
Computer Science
Recommended Citation
Thomas H. Austin, Katerina Potika, and Chris Pollett. "Autonomous Lending Organization on Ethereum with Credit Scoring" 2023 Silicon Valley Cybersecurity Conference, SVCC 2023 (2023). https://doi.org/10.1109/SVCC56964.2023.10164922
