The problem PeosFi solves

In traditional finance, unsecured borrowing is essential, enabling companies to grow, supporting personal projects, and providing funding opportunities for those with limited access to capital. However, bringing this tool onto the blockchain has been challenging due to the absence of traditional credit checks and trust structures. PeosFi solves this by introducing a unique social-based credit system that considers users' on-chain history, social connections, and reputation. Many people, especially in emerging markets, don’t have traditional assets but still need access to quick loans. PeosFi looks at three factors to determine if someone qualifies for a loan.
PeosFi bridges this gap, offering uncollateralized loans in a decentralized way. Instead of requiring collateral, PeosFi looks at a user's:

1. On-Chain Actions: Your history of repaying loans and transactions on the blockchain.
2. Social Connections: By encouraging users to add trustworthy people to their social network, PeosFi builds a network of trust that boosts access to credit.
3. Reputation and Sybil-proof Attestations: Users' standing and past behavior within the network impact their borrowing limits.
   We introduced a completely new concept called Proof of Humaness to confirm that each user is a real person, ensuring no bots enter the network. Using Reclaim Protocol, we verify whether a user has previously completed KYC on platforms like Coinbase or CoinSwitch. Through zero-knowledge proofs, PeosFi authenticates user identity securely and privately without requiring repeated verification.
   Additionally, we developed a custom credit score provider. This provider fetches each user’s credit score based on their on-chain history and social metrics using Reclaim Protocol, making the process secure and efficient. PeosFi’s risk management model incentivizes responsible behavior, adjusting users’ credit lines based on trust, reputation, and on-chain interaction

Challenges I ran into

1. Verifying Users are Real People - To ensure that every borrower is a real person, PeosFi uses Reclaim Protocol to confirm user identity based on past KYC checks from platforms like Coinbase. By generating zero-knowledge proofs, we avoid repeated ID verification while ensuring authenticity.
2. Building a Dynamic Social Credit System - Our unique social credit system incorporates multiple factors, like transaction history, social connections, and attestations, to create a reliable risk model. This involved:

• Analyzing Blockchain Data: Ensuring accurate, real-time insights into user behavior.
• Trust Network: Managing social connections and the reputational impact of trustworthy vs. defaulting contacts.
• Incentives and Penalties: Users are rewarded for maintaining good connections and penalized for risky interactions.

3. Managing Transactions Across Social Networks - Handling decentralized loans where both the borrower and social network participate posed complexity. For instance, if a user needs a larger loan than their score allows, they can request additional funds from trusted contacts. Smart contracts automate this process, ensuring transparent transactions and updates across profiles.