FourPi - Decentralized credit scoring system

Technology has a vital role in the history of humankind. It has helped us to improve our lives in many ways. Whether healthcare, education, commute, transport, or entertainment, technology enhanced our livelihood by an exponential margin. Almost every aspect of our life today involves using technology in one way or another. Thanks to technology, we are closer than ever before.

Yet one aspect of human life that technology is yet to consume fully is 'trust'. Evolution would be a different story if our ancestors did not show trust in one another. Building trust allows us to form relationships with others, cooperate with them and build communities. Without trust, the society we live in today would be very unstable and chaotic.

One technology that is recently evolving and is secure, transparent, and trustworthy is blockchain technology. The world has become even more borderless with the internet and its transparency blockchain technologies, and  Decentralized Finance (DeFi) plays a vital role in trust formation in finance. Blockchain finance and DeFi protocols have gained much popularity in recent years. Until now, it lacked one of the most important things, i.e., the credit scoring system.

What is Credit Scoring System

A credit scoring system is a model that assesses the creditworthiness of borrowers. Every borrower usually has a credit score about their credit habits and history. Lenders use credit scores to determine if the borrower is worthy of lending money, the rate of interest, and other aspects.

The DeFi ecosystem lacks a robust credit scoring system. No good mechanism exists to make the trust of an individual of all the good behavior of individuals on the network.

We need a digital score system for better individual behavior.

Introducing: FourPi

The team behind FourPi is working on solving the very same problem that we discussed. FourPi is building a decentralized on-chain credit scoring system. It provides credit scores to individuals or companies. It does this by using on-chain and off-chain data.

FourPi is creating products for high-trust individuals. The team is working hard to create a global economy of affluent and high-trusted individuals passionate about DeFi and committed to achieving financial success through responsible practices.

What problem is FourPi solving?

FourPi is increasing the accessibility of DeFi to a greater, wider, and wiser audience. It's challenging to navigate the DeFi ecosystem as a beginner. Furthermore, the current system of over-collateralized borrowing and high-interest rates can be discouraging.

FourPi Analyzes users' on-chain and off-chain data and creates their credit scores. The score uses multiple on-chain parameters to understand a user's financial behavior comprehensively. This credit score is accepted on the market.

What are the benefits?

You can borrow funds from DeFi protocols with less collateral in token form as well as get lesser interest rates if you have a good credit score. The FourPi club aims to create a community of like-minded individuals passionate about DeFi and committed to achieving financial success through responsible practices. It also offers exclusive and brag-worthy rewards and services to incentivize good financial behavior.

How does it work?

The credit scoring system of FourPi has two parameters: on-chain data and Off-chain data.

1. On-chain credit score calculation

The process starts by retrieving all wallet addresses which interacted DeFi Then it retrieves all the available account data across all the reserves. This helps the algorithm find total collateral ETH, available borrows ETH, and other necessary data.

The FourPi algorithm uses five key parameters to find on-chain credit:

1. Payment history (P): 38.5%
2. The amount owed & repaid  and Liquidation history (A): 33.5%
3. Length of credit history  (L): 16.5%
4. Credit mix (C): 11.5%
5. Anomaly score/Rug- Pull (X): 20%

Formula to calculate credit score = P + A + L + C - X

Secondly, based on the interaction with landing pool contracts and data from Etherscan, the algorithm constructs a data frame. It uses the following features to do so:

1. Account activity
2. Health factor
3. Loan to value
4. current liquidation
5. Total collateral ETH
6. Credit mix diversification
7. Repayment rate

2. Off-chain credit score calculation

The FourPi algorithm calculates off-chain data by using Oracles. This allows data to not go into centralized systems.

FourPi utilizes both parameters and individually calculates credit scores based on on-chain and off-chain data. Then it accumulates both scores together and creates a new one presented as the credit score.

How to use FourPi?

Using FourPi is just a matter of three simple steps. It doesn't require any staking, collateral, or transaction.

1. Connect your Web3 wallet FourPi's dashboard.
2. Enter your wallet address or your Unstoppable domain. You can also log in with MetaMask or Unstoppable instead.
3. FourPi uses advanced algorithms and artificial intelligence to calculate the scores on your on-chain and off-chain available data.
4. Based on your credit score, you can mint Credit NFT. This NFT is later used to access various privileges.

FourPi API

FourPi also provides an API that individuals and businesses can use to calculate users' credit scores. The API provides the following data to the developers when they send their API key and wallet address along with the request:

• Payment history
• Length of credit history
• Amount owned and repaid
• Credit mix
• Rug-pull
• Liquidation history

How to use FourPi API?

FourPi currently supports CURL, with support for more SDKs and languages coming soon. Here's how you can use FourPi's API to get users' credit scores.

1. Go to FourPi's API Dashboard.
2. Generate an API key. Make sure you are storing it safely and securely.
3. From your application, send the following CURL request. Make sure to replace API_ENDPOINT with the actual API endpoint.

curl --location '{API_ENDPOINT}/score' \\
--header 'x-api-key: (API Key)' \\
--header 'x-public-address: (Public Address)' 

The response would be the credit score of the user and their public address.

Future roadmap

The team announced a beta launch of FourPi Club in the last quarter of 2022. Later in the first quarter of 2023, they launched it on the public main net. Recently in the previous quarter, it added multi-chain support functionality. The team plans to expand itself and include a wider range of digital assets, such as ETFs and stocks, as collateral for borrowing from DeFi.

There is another exciting feature being cooked by the team, a global community of high-trust individuals! In the future, If users have more than 750 scores out of 999, then they can join the community. Such members will be rewarded with exclusive and brag-worthy rewards and products. They will have access to top-notch of various things, from priority visas to luxury goods to other things. The team expects to release this feature until the first quarter of 2024.

Closing notes

FourPi proposes a purely peer-to-peer version of the credit scoring system that would allow on-time scores without being dependent on centralized regional authorities. The system will generate credit scores based on on-chain and off-chain data available to the user.

We have launched FourPi at The Dapp List. Check it out now! 🚀