21/10/21 - Tae Oh | @DeFiRaccoons

For those of you who missed it, we've selected some highlights for you to read, with the full AMA transcript, including community questions, available at the end.


Highlights

Would you please explain to us some of the best features of Creditcoin (fees, credit history and scoring, security, etc.)?

  1. Creditcoin is open, transparent and can be used by any party connected to the Internet, with no innate collateral requirement for borrowers. This means our blockchain can reach and serve millions of users which current DeFi projects can't.
  2. Interoperability - One of our core design philosophies was to make our blockchain as open as it can be. That means building towards interoperability, so that various different ecosystems, blockchains and even different types of credit transactions can all be recorded on our blockchain. A key feature we're looking to add as part of this are DIDs (decentralized identity). Relatedly, these are the kinds of decisions we envision our governance token playing a key role in.

To address your points on scoring specifically, this will be handled by applications or institutions built specifically for, or on top of, Creditcoin. That process is not innate as it stands.

Many of us  have experience with a more traditional, if we can use this word in crypto, way of finance. How are you guys different from what we are used to? What can you say would be the difference between Compound and Creditcoin?

With Creditcoin we’ve taken a very different approach to other projects, and we’re really trying to bridge the gap between real-world lending and the type of lending we see in crypto.

Projects like Compound rely on over-collateralisation of loans to create a ‘trust-less’ ecosystem. This works amazingly for crypto, where people can take out loans against the value of their assets. But realistically speaking, for most people or businesses in the world, they simply don’t have the liquid capital needed to interact with these kind of protocols.

Most parties seeking loans do it because they don’t have enough capital in the first place. Most real-world lending inevitably relies on financial intermediators to assess creditworthiness and dispense capital.  The only tools available to these intermediators is information and contract enforcement.

Creditcoin builds open and accessible informational infrastructure which anyone can use. Smart contracts built on top of Creditcoin can then be used to aid contract enforcement within the ecosystem.

I've seen some connections between you guys and Credal. Can you briefly tell us about what is Credal?

Yes of course. Credal is essentially our API service for Creditcoin, a bit like Infura for Ethereum. It allows developers to interact with Creditcoin without running and maintaining their own Creditcoin nodes. Developers can simply make REST API requests to Credal instead.

Behind the scenes, the Credal server is connected to multiple Creditcoin nodes, communicating with them on behalf of the developer. Any DApps or other applications plugging into the Creditcoin Network will be able to use Credal to handle that process.

For us, this is the big next step, allowing our partners in Africa with over 2M existing users to start recording loan transactions directly on our blockchain, as well as enabling the next generation of DApps, smart contracts or any organisations who wish to start using Creditcoin as it was intended.

Creditcoin is a public blockchain that creates a credit lending infrastructure. I always saw tools like "CIBIL Score" in the traditional lending system as being very useful in prioritizing borrowers. So will Creditcoin implement any such score system, to prioritise & reward the borrowers?

We intentionally left the credit scoring system off-chain. A couple of reasons: 1) there is no golden credit model that fits all. Each lender will want to use a slightly different model. 2) credit assessment is computationally heavy, not a good fit on a blockchain. 3) you want to use both on-chain and off-chain data to assess credit. Some projects claimed to do credit scoring, but they never delivered.

Can you please tell us about the utility of $CTC?

So, the main function of $CTC is as a utility token to record loan transactions on the blockchain. Pretty simple. However, we have two additional functionalities we want to add moving forwards...

Firstly, we want to create a $CTC rental market. This functions similarly to a staking model. To put it simply, this means holders can rent/lend out their $CTC for a fee, with the $CTC being returned to the user after a year. This way $CTC holders will be able to passively generate income from the network’s users.

Secondly, we’re working on a governance framework whereby $CTC will be used to govern various smart contracts within the Creditcoin ecosystem. Token holders will be able to vote on proposed upgrades similarly to something like $COMP, however we’re still thinking long & hard about how this should work. These frameworks are still in their infancy as we've recently seen, so we don’t want to rush things prematurely.


Full Transcript

Do you mind giving us a little on your background?

Of course, I majored in Computational Biology at Carnegie Mellon University. I was introduced to Bitcoin at the computer lab at the school. Soon after graduating, I have started Gluwa, initially in an attempt to build Bitcoin-based social shopping platform which has evolved into a stablecoin project, and eventually expanded to Creditcoin.

Please give us an overview on Creditcoin? What it is and maybe why is it important?

To put it simply, Creditcoin is about building objective, verifiable credit history for anyone in the world.

Everyone deserves credit, whether to start a business, pay a medical emergency or pay for their education. Yet hundreds of millions of people around the world still don’t have access to this basic financial service due to poor market information.

Creditcoin is an interoperable blockchain designed to give people control over their own credit history, verifiable by any 3rd party. For investors, this means opening entirely new markets for credit which are currently limited by the lack of reliable credit information.

By giving people control over their own credit history and making that information transparent so anyone can interact with it, Creditcoin can help democratize the financial industry, moving us away from the status quo where only a handful of companies control and monetize all of our financial data.

When you say interoperable what other blockchains do you have in mind?

Currently, the Creditcoin Network supports Bitcoin and Ethereum ($ETH, ERC20 and Gluwacoin) but the Creditcoin Network can get connected with any open blockchain

Many of us  have experience with a more traditional, if we can use this word in crypto, way of finance. How are you guys different from what we are used to? What can you say would be the difference between Compound and Creditcoin?

With Creditcoin we’ve taken a very different approach to other projects, and we’re really trying to bridge the gap between real-world lending and the type of lending we see in crypto.

Projects like Compound rely on over-collateralisation of loans to create a ‘trust-less’ ecosystem. This works amazingly for crypto, where people can take out loans against the value of their assets. But realistically speaking, for most people or businesses in the world, they simply don’t have the liquid capital needed to interact with these kind of protocols.

Most parties seeking loans do it because they don’t have enough capital in the first place. Most real-world lending inevitably relies on financial intermediators to assess creditworthiness and dispense capital.  The only tools available to these intermediators is information and contract enforcement.

Creditcoin builds open and accessible informational infrastructure which anyone can use. Smart contracts built on top of Creditcoin can then be used to aid contract enforcement within the ecosystem.

How does Creditcoin helps the everyday people with no credit history or credit cards?

Great question. So currently, the people without access to traditional financial services get loans in a number of different ways. Local credit unions, informal lending, which is often rife with exploitation, government programmes and more recently fintechs as well. The problem is, whenever a loan is taken out, none of the credit history from that loan is publicly stored or shared. Without a public credit history, accessibility is reduced, competition decreases, and interest rates go up.

You can almost think of it as interoperability. By getting all that information on public blockchain, any party can know see and interact with that credit history. An open and democratic informational infrastructure layer for everyone in the global economy.

For investors and businesses, reducing informational a-symmetries can open new markets, creating new types of economic relationships, for borrowers without access to the traditional financial system, this means greater loan accessibility and cheaper rates of capital.

To give an example, for a local credit company in Africa, having a verifiable history of loan performance means they could raise and compete for money from anywhere in the world, increasing their access to cheaper capital and opening up new investment opportunities for everyday investors like you and me.

That's well put! Yeah I can see how having a full history would help. But I wonder is this more of an american issue/model/ way of thinking? Is your focus on America or are you looking for more of a globalized way of doing things?

Closer to the latter. We want to build a global standard which anyone can access to, unlike the current infrastructure. Also, the concept of credit came way before the US, so not necessarily American idea we'd say.

Can you please tell us about the utility of $CTC?

So, the main function of $CTC is as a utility token to record loan transactions on the blockchain. Pretty simple. However, we have two additional functionalities we want to add moving forwards...

Firstly, we want to create a $CTC rental market. This functions similarly to a staking model. To put it simply, this means holders can rent/lend out their $CTC for a fee, with the $CTC being returned to the user after a year. This way $CTC holders will be able to passively generate income from the network’s users.

Secondly, we’re working on a governance framework whereby $CTC will be used to govern various smart contracts within the Creditcoin ecosystem. Token holders will be able to vote on proposed upgrades similarly to something like $COMP, however we’re still thinking long & hard about how this should work. These frameworks are still in their infancy as we've recently seen, so we don’t want to rush things prematurely.

So are all the transactions handled with $CTC? No stablecoins or anything?

That's where the interoperability comes in! The loan transactions themselves are settled outside of the Creditcoin Network in $BTC, $ETH or ERC20 tokens (e.g. USDT or USDC). What the Creditcoin Network does is verifying such loan transactions are settled by reading other blockchains and record them with who gave out loans to whom on what terms and who made their repayment.

I've seen some connections between you guys and Credal. Can you briefly tell us about what is Credal?

Yes of course. Credal is essentially our API service for Creditcoin, a bit like Infura for Ethereum. It allows developers to interact with Creditcoin without running and maintaining their own Creditcoin nodes. Developers can simply make REST API requests to Credal instead.

Behind the scenes, the Credal server is connected to multiple Creditcoin nodes, communicating with them on behalf of the developer. Any DApps or other applications plugging into the Creditcoin Network will be able to use Credal to handle that process.

For us, this is the big next step, allowing our partners in Africa with over 2M existing users to start recording loan transactions directly on our blockchain, as well as enabling the next generation of DApps, smart contracts or any organisations who wish to start using Creditcoin as it was intended.

Ok so why go with Credal? What does it brings to the table compared to other API services?

It is the first API service that connects you to the Creditcoin Network! Until other people start building another API service, Credal will be the only one, too.

What can you tell us about Gluwa and how is it connected with Creditcoin?

Gluwa is the (hopefully just for now) principal technology provider of Creditcoin, and is it were, the first organisation trying to build the lending infrastructure on top of that.

We’re hoping more people join the development of Creditcoin! As a member of Gluwa or as an independent contributor. If you are interested, please contact us via Github.

https://github.com/gluwa/Creditcoin

We also have an investment product whereby anyone (sadly US excluded) can invest and earn up to 12% APY on their Gluwa-native stablecoins. The funds are used to invest in various credit investment opportunities focused across Africa and Asean, generating interest for our investors. That process, as well as our partner companies, will be operated on top of Creditcoin, with Gluwa Invest acting as Creditcoin’s first real investment fund.

Well you surely got my attention with 12% APY for a stablecoin. So how did you think about connecting Creditcoin with Gluwa? Was it always the plan or did it develop naturally?

Both. We have designed Creditcoin to enhance blockchain-based finance and introduce the concept of credit to the space. Given a currency, you want to hold it, spend it, and invest it. The concept of Creditcoin was a natural progress of what Gluwa has been building.

Would you please explain to us some of the best features of Creditcoin (fees, credit history and scoring, security, etc.)?

  1. Creditcoin is open, transparent and can be used by any party connected to the Internet, with no innate collateral requirement for borrowers. This means our blockchain can reach and serve millions of users which current DeFi projects can't.
  2. Interoperability - One of our core design philosophies was to make our blockchain as open as it can be. That means building towards interoperability, so that various different ecosystems, blockchains and even different types of credit transactions can all be recorded on our blockchain. A key feature we're looking to add as part of this are DIDs (decentralized identity). Relatedly, these are the kinds of decisions we envision our governance token playing a key role in.

To address your points on scoring specifically, this will be handled by applications or institutions built specifically for, or on top of, Creditcoin. That process is not innate as it stands.

I was able to see something about a new concept for this kind of market, mining pools. How are these going to influence the ecosystem?

We want to lower the barriers of entry to becoming a Creditcoin miner so that more people can join the network, contributing to its security. To do so, we envision creating a mining pool platform like AntPool. Further, we will support or fund multiple mining pools and let them run independently, increasing the network's decentralization. Together, the Creditcoin Network will become more robust and stable.

That's rather cool! Do you have in mind any early investors promo or something?

You can get the early mover's advantage by mining today :D when the network is the smallest!

Also, contact us if you are interested in starting a mining pool. We'd like to help.

We like to finish this part of the AMA by looking at what is happening in the near term. Could you please share with us the first milestones on the roadmap?

5 Million live users. In the short term, all our smaller milestones can be boiled down to the following: Credal release, listing on more exchanges, and Creditcoin ecosystem/partner expansion focusing on credit businesses in the developing world.

What exchanges are you on right now?

OKEx, Bittrex Global and GOPAX :)


Thank you so much, this concludes the first part of our AMA session! Now let's move onto what our community wants to know more of.

1) Can you list 1-3 killer features of Your Project that makes it ahead of its competitors? What is the competitive advantage your platform has that you feel most confident about?

1. Non-collateralized/credit lending - we can reach anyone on the Internet, even if you don't have crypto yet!

2. Interoperability - by design, we can work with any other blockchain.

Most DeFi projects stay within the crypto-space, not touching the real-world economy. We connect to the end-users well before anyone is brave enough to do so.

2) Can anyone from anywhere in the world get loans in your platform? Or do you plan to expand in the future? What all items do you take in as collateral? Are digital assets also considered as collateral? Do the users need to hold $CTC to get full access to your platform?

Anyone on the Internet can ask for a loan on the Creditcoin Network. However, a lender has to accept your deal to get it fulfilled. We are currently most active in Africa since our lenders are concentrated in the region. We are planning to expand to other parts of the world by inviting more lenders to our network.

The Creditcoin Network does not have a concept of collateral, and it is entirely credit-based.

While you need to spend $CTC to post your loan offers on the network, we see loan platforms pay that on behalf of their borrowers. For end-users, the UX is no different from CeFi.

3) When using CTC and its swap feature, 2 swap transactions are performed simultaneously, my question is, won’t this significantly increase the network fees that users must pay? Why 2 swaps at once?

I think you are talking about another project. There are no swap transactions on the Creditcoin Network.

4) Hello sir, I have A doubtful question in my mind that is, If the event the borrower is unable to fulfill his/her repayment obligation how does Creditcoin insure the lender against total loss of funds? Is the credit market physically regulated by financial bodies?

Important question. The network itself cannot collect loans. However, lenders can make an off-chain agreement with the borrower that enables them to physically and legally collect loans. For instance, a fundraiser who is a regulated financial institution can provide that information off-chain to prove its creditworthiness and legal terms. With that in mind, the lender will assess both on-chain and off-chain information about the fundraiser to make the investment decision.

5) At the basic level creditcoin connects investors  and borrowers who register matching loans condition requirements. What are the condition requirements used for lenders and borrowers?

The lender needs to choose the borrower that it likes. Thus, the condition or requirements depends on the lender. Since each lender makes its own decision, a borrower may get a loan from lender A and not from lender B.

6) Creditcoin is a public blockchain that creates a credit lending infrastructure. I always saw tools like "CIBIL Score" in the traditional lending system as being very useful in prioritizing borrowers. So will Creditcoin implement any such score system, to prioritise & reward the borrowers?

We intentionally left the credit scoring system off-chain. A couple of reasons: 1) there is no golden credit model that fits all. Each lender will want to use a slightly different model. 2) credit assessment is computationally heavy, not a good fit on a blockchain. 3) you want to use both on-chain and off-chain data to assess credit. Some projects claimed to do credit scoring, but they never delivered.