Blockchain lending system and method

Keyword list

Term definitionBlockchainAn open, distributed database that records transactions between parties efficiently, verifiably, and permanently.Smart contractA set of promises specified in digital form, including the parties' agreement to fulfill those promises. (Szabo. Formalizing and Securing Relationships on Public Networks. 1997.)Decentralized Application (DApp)An application whose backend code runs on a decentralized peer-to-peer network rather than on a centralized server.Off-chain computing systemA system or part of a system that is configured to interact with data stored in an off-chain data structure that is not part of a blockchain.On-chain computing systemA system or part of a system that is configured to interact with data stored in an on-chain data structure (e.g., a blockchain).Crypto-assetAn asset that is formed in digital form using blockchain technology and can capture and store value like a traditional asset.Digital identityA self-sovereign identity established by a user using decentralized technology that can facilitate negotiations and agreements.Credit scoreA self-sovereign credit score provided to a user using decentralized technology that can help digital asset lenders better understand counterparty risk before committing. DApp frontend runs on the user interface system and provides a user interface for the lending market interface. DApp backend interacts with the blockchain, executes smart contracts and manages transactions. Smart contract addresses are used to reference the addresses of smart contracts on the blockchain (e.g., blockchain user addresses). Short answer questions

What roles do the off-chain computing system and on-chain computing system play in blockchain lending platforms?

The off-chain computing system is mainly used to facilitate communication and negotiation between users, such as broadcasting loan requirements and quotes, and receiving and processing repayments. The on-chain computing system is responsible for executing smart contracts, recording transaction history, and ensuring the security and immutability of transactions.

Explain the concept of "off-chain agreement matching and on-chain settlement".

The concept refers to the process in which users match and negotiate loan agreements through the off-chain computing system. After reaching an agreement, the final loan agreement is deployed to the chain in the form of a smart contract for settlement and execution.

Why is cross-chain compatibility important for blockchain lending platforms?

Cross-chain compatibility allows platforms to connect to different blockchain networks, thereby supporting a wider range of crypto asset types, providing users with more choices, and improving the liquidity of the platform.

List three types of loans that can be offered through this blockchain lending platform.

Fixed-rate term loan

Floating-rate demand loan

Floating or fixed-rate term loan

How does the DApp work in this lending platform?

The DApp frontend runs on the user interface system and provides an interface for users to interact with the platform. Users submit loan requests or quotes through the DApp frontend and manage their loans. The DApp backend interacts with the blockchain to execute smart contracts and ensure smooth transactions.

Explain the role of smart contracts in the blockchain lending platform.

Smart contracts are pre-written programs stored on the blockchain that are used to automatically execute and enforce the terms of the loan agreement, such as payment schedules, collateral management, and default processing.

How are crypto assets digitized on this platform?

Crypto assets can be digitized by third-party providers or using tools provided by the platform. Digitized assets can be transferred, traded, loaned, etc. through the platform.

How do digital identities and credit scores improve the security of the platform?

Digital identities can verify the identity of users, while credit scores can assess the credit risk of users. This information can help lenders better understand borrowers and reduce lending risks.

After the borrower accepts the loan offer, how does the settlement interface guide the user to complete the transaction?

The settlement interface will gradually guide the borrower and lender to complete the transaction, including steps such as sending collateral, sending loan funds, and confirming loan issuance.

How do smart contracts handle loan defaults?

If the borrower fails to repay on time, the smart contract will automatically transfer the collateral to the lender to reduce the lender's losses.

Paper title

Analyze and compare the advantages and disadvantages of traditional lending systems and blockchain-based lending systems.

Discuss how the "off-chain protocol matching and on-chain settlement" mechanism can improve the efficiency and security of blockchain lending platforms.

Explore the impact of cross-chain compatibility on the development of blockchain lending platforms.

Analyze the risks and challenges of smart contracts in blockchain lending platforms and propose corresponding solutions.

Look forward to the future development trend of blockchain-based lending platforms and analyze their impact on the financial industry.