ZK-Powered DeFi Credit Score System
A decentralized, privacy-preserving credit scoring system for DeFi lenders and borrowers using Zero-Knowledge Proofs.
Created on 13th February 2025
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ZK-Powered DeFi Credit Score System
A decentralized, privacy-preserving credit scoring system for DeFi lenders and borrowers using Zero-Knowledge Proofs.
The problem ZK-Powered DeFi Credit Score System solves
Traditional credit scoring systems rely on centralized authorities, requiring users to disclose sensitive financial information. This creates significant privacy concerns, bias, and limits access to financial services, especially in decentralized finance (DeFi).
How this solves it?
Utilizes Zero-Knowledge Proofs (ZKPs) to generate a credit score without revealing personal financial history.
Enables DeFi lenders to assess borrowers' creditworthiness while maintaining privacy.
Completely on-chain verification, ensuring security and decentralization.
Provides a trustless and censorship-resistant alternative to traditional credit systems.
This solution empowers users with financial freedom while ensuring secure lending practices in DeFi.
Challenges I ran into
1️⃣ Implementing zk-SNARK Proof Verification
Challenge: Ensuring proper proof verification using Groth16 was complex due to incorrect input formatting.
Solution: Carefully mapped the public signals with the correct constraints in snarkJS.
2️⃣ Storing and Fetching Credit Scores On-Chain
Challenge: Ensuring efficient blockchain storage while keeping costs low.
Solution: Optimized Ethereum smart contract using event-based retrieval for gas efficiency.
3️⃣ Frontend State Management & UI Animations
Challenge: Ensuring seamless wallet connection, file uploads, and dynamic UI updates.
Solution: Used React (Next.js), Tailwind CSS, and Framer Motion for smooth UX.
4️⃣ Multi-Account Consistency in Credit Scores
Challenge: Initially, every user received the same credit score (39801).
Solution: Adjusted ZKP proof inputs based on real financial data (loan and repayment history).
Each of these challenges provided valuable insights into working with ZKPs in real-world applications.
Tracks Applied (2)
Arbitrum Stylus Web3 dApp with zkVerify
Arbitrum
zkVerify Main Prize Track
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