Stark Protocol

Stark Protocol enables everyone to borrow without any collateral. Undercollaterised lending is still needed to be solved in this Defi space. Some protocols try to provide it but they are unable to do it to their best extent as they only provide one solution to users. But Stark Protocol enables no collateral credit by combining multiple things like credit score and loans backed by your friend.

Like in Traditional Banking, in some situations a borrower needs someone(securer) to back the deal between the borrower and the bank, where if the borrower is unable to repay the credit to the bank, then the securer will have to pay the remaining about to the bank. With this situation we have created a system where when a user(borrower) wants to borrow the assets from the protocol but is not able to due to insufficient balance then he may request his friend to secure the loan. And if the securer accepts it, then his balance of the same amount as the Loan Amount will be locked in the protocol, and his friend will be able to borrow the assets from the protocol. Here are the following benefits of a Guaranty Backed Loan:- The Borrower will get the amount he needed with collateralizing. The Securer will earn greater interest by locking his amount in the protocol and can even get interested from the borrower if wanted. The protocol will earn the assets by implementing interest on the deal. Can pay this loan in installments for a specific period.

In the traditional market, where P2P loans also exist, we have made a functionality, P2P Lending, where the user can ask for a loan from the other user (with some interest on it if the lender implements it). Here are the following benefits of a P2P Loan:- The transaction will be P2P or between friends, so it will have some personal trust. The interest will be implemented only by the Lender, not the platform (at first). The platform will earn assets if the borrower extends the duration of the loan. Can pay this loan in installments for a specific period.

Both types of loans will maintain functionality to modify the Credit Score of the borrower so that in the future the lenders or friends can check out the risk factor by analyzing their Credit Score. The credit score will be modified after considering various factors like the number of installments used, the time period required in total, the previous history of the loans, etc.

And all the chat will happen on the platform only using the decentralized chat application where the user only needs to enter the address of their friend or the person from whom they want to request their guaranty or a loan.

Stark Protocol is a decentralized protocol. We have gone to every extent possible in this time frame to make this whole protocol decentralized.

Decentralization was achieved by using different technologies. These are the following Technologies we have used in the Stark Protocol:-

1. Polygon (Sponsor) Polygon Mumbai Testnet helped us to deploy smart contracts and to make transactions very quick.
2. XMTP (Sponsor) XMTP SDK helped us in building a decentralized application where users can chat and make a deal.
3. Filecoin/IPFS (Sponsor) IPFS helps us in storing the Credit Score Token (SBT) metadata and saves the cost of storing the data on-chain.
4. Moralis Moralis helped to make frontend with hooks
5. Hardhat Hardhat helped us in compiling, testing, and deploying the contracts.
6. Chainlink Chainlink helps in maintaining the modifying Credit Score Token (SBT) and its metadata.
7. Next.js It helps us build the UI of the Stark Protocol.

We developed all the Smart Contracts with Solidity, using the Open Zeppelin Contracts. These contracts are thoroughly tested by building different tests using Hardhat and later deployed on the Polygon Testnet using the same. The Chainlink implemented in the contracts helps us in making the dynamic SBT tokens, which change as the Credit Score of the user changes. And the data of these tokens are stored in the IPFS to save space on-chain and reduce the transaction cost. On the client side, Next.js help us in building a serverless client side, and with help of Moralis hooks, we were helping to maintain the state of the UI. Not to mention, XMTP helped us exceptionally to build a decentralized chat application that works as we want.

The extraordinary thing we consider in this project is the Credit Score Token. They are built on the concept of the Soul Bound Tokens, which have the non-transferring property. Credit Score Token will be minted only once by a user in his lifetime, i.e. when he enters the protocol for the very first time. It will maintain the Credit Score of the users, which will help other users to check the risk of lending or backing someone their assets.

And at last, the thing which we are proud of in the period of building is that we got to learn many new concepts of Web3 and built strong connections with different participants and sponsor teams.