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

1. Your On-Chain History: Have you paid back loans in the past?
2. Your Social Connections: Are your friends and contacts reliable? Do they back you up if you need more funds?
3. Your Social Reputation: Is your online presence trustworthy and stable?
   We also introduced a completely new concept called Proof of Humaness to confirm that each user is a real person, ensuring no bots enter the network. Through Reclaim Protocol, we verify whether a user has previously completed KYC on platforms like Coinbase or CoinSwitch. Using zero-knowledge proofs, PeosFi authenticates user identity securely and privately without requiring repeated verification.
   PeosFi’s risk management model incentivizes responsible behavior, adjusting users’ credit lines based on trust, reputation, and on-chain interactions. This creates a safe, accessible lending environment where users can obtain loans based on their history, social trust, and community involvement

Challenges I ran into

1. Verifying Users are Real People - We needed a way to make sure every user was an actual person (not a bot) without forcing them to do extra paperwork or ID checks every time. To solve this, we integrated with Reclaim Protocol, which allows us to confirm users’ identity if they’ve done ID checks (KYC) with platforms like Coinbase or CoinSwitch. This process is secure and private, and no personal info gets shared with us.
2. Creating a Social Credit Score - PeosFi uses a unique scoring system that looks at: - Blockchain Data: It checks if users have a good track record of paying back their loans. - Network Trust: Friends or contacts who support you can increase your credit, and if they are reliable, your score goes up. If they default on loans, it might lower your score. - Social Media: By connecting with platforms like Twitter, we get a sense of a user’s reputation. All of this combines into a score that tells us if a user can borrow more funds.
3. Managing Loan and Social Network Transactions - Handling transactions between the user, PeosFi, and their network contacts is complex. For example, when a user asks their contacts for extra funds: We set up smart contracts that listen for updates, so when contacts approve a loan request, it’s tracked automatically. - Notifications are triggered when loans are approved or repaid, updating the user’s profile and credit score.