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Community Defi Scalability


{"ops":[{"attributes":{"bold":true},"insert":"Recipient of Wave III ConsenSys Grant for Social Impact."},{"insert":"\n\n"},{"attributes":{"italic":true},"insert":"The world needs banking, but it does not need banks."},{"insert":"\n\nWe're empowering individuals to assess risk, give and receive loans, and earn interest on savings, without relying on banks or other financial intermediaries.\n\n------\n\nOver 20% of the global population is excluded from the formal financial system, be it due to corruption, a lack of credit history, or the absence of institutional finance where they live. Of these 1.7 billion people, 130 million adults in high-income countries (North America, Europe, the Gulf) struggle to access credit, often relying on their friends and family for their borrowing needs.\n\nMore generally, there is a US$5 trillion funding gap for MSMEs (Micro, Small and Medium Enterprises) in developing countries, whilst US$13 trillion sits in negative yield bonds across the globe. Given that over a billion people worldwide are currently using mobile money, there is ample potential to mobilise this capital to earn positive returns, given the right capital protection mechanisms.\n\nArboreum was inspired by our experiences at the United Nations World Food Programme, working to address large scale food crises in countries such as Yemen. Specifically, over half of the 100 million hungry people we aided each year were "},{"attributes":{"italic":true},"insert":"farmers"},{"insert":": 90% of which lacked access to the finance needed for them to take care of their own needs.\n\nIn short, Arboreum is developing a financial distribution model for de-risking loans across networks of participants who extend credit to their peers in the form of "},{"attributes":{"italic":true},"insert":"trust"},{"insert":", wherein the principal of a loan can be split in a fractal manner across a wider group of lenders via a chain of accountability, with an increasing level of collateralisation the further away a lender is from the initial borrower.\n\nBy doing so, we provide positive return lending opportunities to those who would otherwise not be aware of the opportunity, or for whom such lending is perceived to be excessively risky. Conversely, borrowers who are in dire need of capital - and are just as trustworthy as those with high-rated credit scores - are able to tap a much wider reservoir of funding.\n\nFundamentally, our model involves significant amounts of negotiation between machine-learning agents associated with a node (participant) - determining the efficient frontiers for which local peers to a borrower (and "},{"attributes":{"italic":true},"insert":"their "},{"insert":"neighbouring peers, etc) are willing to purchase debt. We are using distributed ledger technology for this purpose, wherein the calculations themselves are performed locally over "},{"attributes":{"italic":true},"insert":"demand functions"},{"insert":" propagated over a blockchain network. These demand functions (polynomial expressions) have the potential to be polymorphic in purpose - the Arboreum model is applicable to far more than just micro-credit facilities - and we intend to develop an open source protocol for their communication and interpretation.\n\nIn conjunction with our ConsenSys grant, we have struck preliminary agreements with FinancePeer.com and two peer-to-peer lending institutions in sub-Saharan Africa for the purposes of piloting our platform, which we aim to have on the ground by August 2020. Your donation will go towards paying world-class experts in the fields of non-linear optimisation and computational complexity to refine our initial model, and as a bounty for DeFi enthusiasts to participate in a mock run of a network to test our behavioural assumptions. Every dollar helps, and we'd really appreciate your support.\n\nIf you want to read more about what we're up to, there's an ("},{"attributes":{"italic":true},"insert":"evolving!"},{"insert":") whitepaper available "},{"attributes":{"link":"https://www.dropbox.com/s/rncyrd2camzhrw9/A_Proposal_For_Risk_Distribution_Over_Intelligent_Credit_Networks.pdf?dl=0"},"insert":"here"},{"insert":", a proof-of-concept demo running "},{"attributes":{"link":""},"insert":"here"},{"insert":", a pitch-deck "},{"attributes":{"link":"https://www.dropbox.com/s/d7x4xo9j9u0937t/Arboreum_Summary_Feb2020.pdf?dl=0"},"insert":"here"},{"insert":", and our site is "},{"attributes":{"link":"https://www.arboreum.dev"},"insert":"https://www.arboreum.dev"},{"insert":".\n\nWe're excited to get going. We're excited to have you join us.\n\nDr Laurence E. Day\nCo-Founder & CTO, Arboreum\n"}]}

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