Lendora

We're championing financial inclusion for underserved nations. Through our platform, a Bahamian fisherman or Nigerian villager can borrow CBDCs, valued on trust, not over-collateralization.

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Inspiration

In a world with uneven financial infrastructures, we harness blockchain and emerging CBDC technology to bridge the gap. Our mission? Foster financial inclusion in underserved nations.

While most crypto platforms mandate over-collateralization, true borrowing often demands more than what one possesses. Our goal is to offer individuals and nations the lending and borrowing dynamics prevalent in developed countries.

What it does

Lendora is an XRP ledger-powered wallet offering diverse financial services, including lending, borrowing, and staking. Crafted with user experience in mind, our interface simplifies and enhances the money lending and borrowing process.

Lending Service

User can choose to lend their CBDC's into their respective lending pools. At the moment Lendora supports the Nigerian CBDC and the Bahamas CBDC. A Nigerian user can therefore choose to lend its CBDC into the Nigerian Lending Pool and benefit from the rewards.

Users have the flexibility to lend their CBDCs to specific lending pools. Currently, for testing purposes, Lendora recognizes the Nigerian CBDC token as 'ENA' and the Bahamas CBDC token as 'BSD'. As an example, a Nigerian user can contribute their ENA to the Nigerian Lending Pool and earn associated rewards.

The rewards for lending are calculated using the average interest rates defined by our borrowers.

Staking Service

At Lendora, we're reshaping the borrowing landscape by minimizing the need for large collateral. We've taken cues from the traditional credit score system but added our signature approach.

When users decide to borrow, they deposit XRP in our staking pool. In return, they receive 300 CTX tokens, representing their creditworthiness, plus STX tokens equivalent to their staked XRP. For instance, a 500 XRP stake yields 500 STX. To withdraw any staked XRP, they return the equivalent STX.

Our credit system is straightforward: a score of 300 CTX comes with a 20% interest rate, while 800 CTX brings it down to just 0.5%. The more XRP you stake, the better your interest rate.

Rewards are calculated based on the duration and amount of staking. However, we've set an upper limit, capping rewards at 500.

This approach ensures that our lenders are always compensated, even if some borrowers can't fulfill their obligations.

Borrowing Service

At Lendora, users have the option to borrow from two distinct pools: the Nigerian CBDC pool and the Bahamas CBDC pool. Presently, users can borrow up to double their staked XRP amount.

Upon confirming the borrowing amount, all of the user's CTX tokens and STX tokens are temporarily locked, preventing additional borrowing and retrieval of their funds from the staking pool until repayment is complete.

Post-transaction, Lendora introduces the user to our Smart Repayment Engine. Here, users determine their repayment term, ranging from 6 to 24 weeks. This engine auto-calculates bi-weekly repayments based on the chosen term and user's interest rate, subsequently drafting checks payable to the respective lending pool.

Every two weeks, the lending pool encashes these checks. Upon the final check clearance, the user's CTX tokens and STX tokens are reinstated.

Our overarching goal? To simplify borrowing by automating repayments, freeing users from the concerns of scheduling and amount due.

Overall feature of Lendora

Lendora stands as a beacon of innovation in the financial landscape. By bridging the tenets of traditional credit scores with blockchain's transparency, we offer a lending and borrowing system that favors both parties. Our unique model of staking XRP to determine creditworthiness and the provision of STX tokens ensures flexibility for borrowers. Meanwhile, the clearly defined reward structure offers transparency and tangible benefits to our lenders. In the ever-evolving world of digital finance, Lendora aims to prioritize user experience, fairness, and security, cultivating a trustworthy environment for all stakeholders.

How we built it

Fronted

Developed using the robust ReactJS, ensuring a smooth user experience.

Backend

Coded in Javascript, our backend integrates seamlessly with the XRP Ledger API, leveraging two of its primary features:

      **TrustLines**

      Upon wallet creation, Lendora initiates essential trustlines between the user's wallet, lending pools, and staking pools. This mechanism lets these pools issue their respective tokens to the user. While setting up nearly 10 trustlines can make wallet seed generation slightly time-consuming, subsequent operations are typically swift, completing within seconds.

      **Checks**

      Our Smart Repayment Engine harnesses the XRP Ledger's 'checks' functionality. This automation allows users to set their preferred loan repayment timeline without concerns about payment timings or amounts.

Other features of the XRP Ledger

Lendora incorporates fundamental transaction techniques provided by the XRP Ledger to maintain operational fluidity.

Database

Prioritizing user data security, our database finds its home on the STORJ network—a decentralized file storage solution known for its resilience.

AWS EC2

Leveraging the reliability of Amazon Web Services (AWS), both our frontend and backend are hosted on AWS EC2 instances.

Challenges we ran into

The Genesis of the Idea

Our initial endeavor was to design a platform enabling Central Banks to set policies using smart contracts on the XRP ledger, where each CBDC transaction would undergo validation. However, the absence of smart contract support on XRP and the intricate nature of hooks steered us away from this concept.

Our pivot led us to identify the widespread issue of financial inclusion in underserved countries. The question we sought to answer became clear: "How can we usher financial inclusivity into regions that lack it, while ensuring simplicity, security, and transparency?" From this crucible of thought, Lendora was conceived.

Navigating the XRP Ledger

Transitioning from familiar terrains like Ethereum and Polygon to the XRP ledger presented a steep learning curve. Grasping XRP's unique functionalities and distilling its extensive documentation was challenging. Our initial reliance on the Escrow functionality hit a roadblock, which eventually led us to discover the potential of Checks for our Smart Repayment Engine.

Crafting a Groundbreaking yet Secure Financial System

Eliminating over-collateralization was just one part of the puzzle. Replacing it with an equally effective system was the real challenge. We toyed with the idea of a decentralized lending platform, but the inherent risks for our lenders were palpable, especially when considering loans surpassing the staked XRP amount. Aligning with the CBDCs' regulated nature, Lendora evolved into a centralized solution. Integrating robust KYC measures ensures users can borrow beyond their stakes, striking a balance between efficiency and security.

Demo

We ran into several issues with our backend API and the CORS policy. We are sorry that we won't be able to provide a demo for the jury the test the platform, however the platform works as expected and it is showcased during the demo video

Accomplishments that we're proud of

Lendora is close to realizing our full vision. Admittedly, time constraints kept us from implementing the lenders' rewards. However, the platform stands out for its simplicity and speed. While we recognize that the financial framework might not be the pinnacle of security or complexity, we've successfully laid down a foundational reward system and a strategy that prioritizes both user experience and security.

A standout accomplishment is our successful mock-up of the Nigerian and Bahamian CBDCs. This not only showcases Lendora's real-world applicability but also demonstrates the ease with which we can integrate other CBDCs.

Above all, our pride lies in the fact that Lendora has manifested exactly as we envisioned. We are confident in its potential to significantly advance financial inclusion in underserved regions.

What we learned

Lendora incorporates real-world financial computations, including interest rates, staking rewards, credit score assessments, and repayment structures. Diving into these concepts was not just intellectually stimulating but posed both theoretical and practical challenges. This endeavor significantly broadened our financial knowledge.

Navigating the XRPL library initially felt daunting, sparking moments of self-doubt about our project's feasibility. However, with time, we became adept at utilizing the XRP Ledger's features, appreciating its seamless integration capabilities.

Reflecting on our journey, we recognize our dual growth – deepening our understanding of financial mechanisms and strategies, while also mastering the technical nuances of the XRPL library.

What's next for Lendora

Lendora is in its infancy, with the current demo serving as a foundational proof of concept. Our next steps involve collaborating with financial experts to fortify our strategies and computations, ensuring a safe and efficient platform. Afterward, comprehensive simulations will assess and mitigate potential risks. Eventually, we aim to pilot Lendora in an underserved nation, such as Nigeria, offering a hands-on validation of our solution. Our ultimate goal is to accommodate every emerging CBDC without compromising security or performance.

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