The problem No-Loss-Exchange solves

No-Loss-Exchange provides a new way for small businesses to scale by providing easy access to liquidity.

For small businesses one biggest problem is loans. If they are looking to scale they have to go through a lot of legal formalities to get that loan and for some businesses, this ultimately defeats the purpose. We can use different DEFI protocols to solve these issues.

I have used AAVE, specifically AAVE's credit delegation feature to solve this issue. The problem with credit delegation is that as soon as you decide to delegate your credit line to a peer outside of your trusted circle, you are exposed to real credit risk in addition to counterparty risk.

With No-Loss-Exchange depositors can earn the extra yield with lower risks.
Firstly, because your borrowers are a list of businesses in your community which you trust and interact with on daily basis. So you kind of serve as an auditor.
Secondly, because No-Loss-Exchange diversifies your risks: smart contract algorithm allocates your credit line to several businesses minimizing your exposure to a particular counterparty.

Challenges I ran into

Will Update later