Proof of Funds for TrueFi Borrowers

Hi all, Michael from Lumen Proof here.

I’m excited to propose a new on-chain lending tool for TrueFi to verify the assets of potential borrowers, evaluate their borrow capacity using attestation data and overall increase trust between lenders and borrowers.

Problem:

TradFi leans on the crutch of credit scores, an established third-party system that assesses an individual’s financial history. In DeFi, we have managed to emulate this process, but thinking of DeFi lending in this way is limiting the potential of blockchain lending protocols. What we truly need is not merely a third-party opinion but an unbiased and forward-thinking paradigm, one that transcends the confines of traditional credit scoring and empowers lenders to gain insights into specific aspects of a borrower’s past and current activities that hold the most relevance to their unique circumstances – without revealing anything else.

Solution:

A privacy-enabled proof of funds system for on-chain lending. Partner with Lumen Proof and use Lumen’s privacy preserving technology to verify funds and validate a borrower’s ownership of on-chain assets held across centralized exchanges. By having borrowers attest to their assets and liabilities, lenders gain trust through transparency by not having to take the borrowers’ “word for it.” Borrowers receive improved borrow rates and/or extended credit limits by completing the Lumen Proof attestation process.

Technology:

Lumen uses zero-knowledge proofs for the verification of DeFi positions without revealing the denominating assets or the wallets containing said asset and leverages confidential computing with Trusted Execution Environments (TEEs) to protect the authenticity and confidentiality of financial data and exchange API keys. Rest assured your financial privacy is safe with Lumen.

Let’s redefine on-chain lending together. Would love to hear your thoughts on this tool and how a potential integration with TrueFi will look like.

Contact

Michael Chiang
Co-Founder & CEO
Telegram: @diamondogedad

Lumen Proof Borrower Flow

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Thanks @diamondogedad for posting this!

In my opinion, this is a compelling pitch:

By having borrowers attest to their assets and liabilities, lenders gain trust through transparency by not having to take the borrowers’ “word for it.” Borrowers receive improved borrow rates and/or extended credit limits by completing the Lumen Proof attestation process.

Lumen proofs could be a valuable component in the toolbox for borrowers and PMs that want to establish their on-chain reputation and creditworthiness.

I can see this adding value in TrueFi’s onboarding process, and I look forward to collaborating with you and with prospective borrowers/PMs to make it happen.

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To go one step further, does/could this include the transparency of how borrowed funds are spent? In terms of whether funds are being used for the purposes for which they were borrowed…

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Thanks @tylerw we look forward to collaborating as well!

Great question! Dynamic monitoring of asset reparation is definitely something we’re looking to include as a future feature. We could start by having static snapshots of breakdown of assets sorted based on liquidity (e.g. top 100 CoinGecko etc…) or based on where assets are being held (e.g. Coinbase, Binance, OKX…).

Taking those static snapshots would be laying down the groundwork for dynamic monitoring – it would most certainly set the stage for a more detailed view. Plus, it’s a smart move for gathering the data needed to keep making things even more transparent in the future.

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