Token Design Whitepaper Draft V 0.1

Decentralized credit scoring and microcredit

A decentralized credit score evaluation and microcredit platform that

combines new sources of data to match small lenders and borrowers.

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Table of Contents1. Introduction 3

1.1 The Problem 5

1.2 Previous and Related Work 6

2. Protocol Mechanism 6

7

8

9

10

3. How will Colendi protocol work? 11

3.1 Identity and Scoring 11

12

3.3 Rewarding of early adaptors 13

3.4 Staking 14

3.5 Slashing Conditions 15

3.6 Future Work 16

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4.1 Installment Shopping with Colendi Score 17

4.2 Microfinance 18

4.3 P2P Financing 18

4.4 Colendi Score as Financial Reputation 18

4.5 Colendi ID - Self Sovereign Identity 19

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4.

5. Conclusion

6. References

3.2 Contirubtion-based reward mechanism

2.1 Borrowers

2.2 Lenders

2.3 Data Partners

2.4 Data Integrators

Use Cases

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1. Introduction Colendi project is a credit scoring system that can leverage new sources of information about borrowers

to assess creditworthiness in addition to traditional measures. This technology creates financing oppor-

tunities to new markets of underserved individuals and businesses. This is accomplished by evaluating

complementary and distributed data segments of a user with the help of machine learning based credit

scoring technologies. Early in the project, it was already apparent that there existed common data para-

digms for storage and evaluation of data sources, which could be implemented across seemingly dispa-

rate data streams sharing specific underlying properties.

For example, transaction histories are very valuable tools in assessing creditworthiness, as steady pur-

chase habits over time may reveal stability and regularity that imply higher probabilities of on-time pay-

ments and therefore lower probabilities of default. Transactions can be leveraged to score credit across

sectors and industries, from simple hardware stores to global shipping companies. They share certain

common attributes such as date of purchase, amount, descriptions of items, and involved parties.

However, the same exact model for scoring credit based on hardware store transactions cannot be di-

rectly applied to global shipping companies, as the industries and transaction characteristics are very

different. The financial sector is fraught with the overextension of models that do not assume an inclusive

purpose, thus eventually falling to faulty assumptions. Therefore, it is important to allow the param-

eterization of any transaction history module to accommodate the major modes of its related credit

evaluation across several industries and sectors. The fine-tuning of these base models and necessary

supporting data integrations require substantial efforts, expertise, and resources.

Considering data, the richest collection belongs to the users. By allowing Colendi to access certain smartphone and social media data, users will be able to obtain their in-itial credit scores even without a record of accomplishment. The scoring algorithm is designed for machine learning to become ever more sophisticated. Users will also be entitled to decide which data to provide to Colendi, and even access their corresponding data held by Colendi data partners.

Data-integration process is arguably the hardest part of building a trustworthy credit scoring platform.

The process can easily have intricacies such as incorrect or missing data, usage of the wrong format, and

so on. Businesses should always onboard the first profile data to assess its quality as a data resource

and compatibility to the environment in which the data will be integrated. This brings up a complex and

cumbersome development issue, which regular businesses cannot afford the time or resources, while

bigger businesses have hard time to prioritize it to make a viable platform that is valid for any potential

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customer. The inevitable result is an anachronism, underdeveloped credit scoring mechanism that fails

to be inclusive for a pronounced proportion of the society. Therefore, adding to its comprehensive credit

scoring technology, Colendi creates an incentivization system that is designed and tested for the purpos-

es of rewarding data integrators that bring new data to the network.

Colendi proposes a specialized protocol on blockchain for credit scoring along a complementary system

to bootstrap global network growth to radically transform credit scoring by covering both unbanked and

banked populations.

FINANCIAL

PASSPORT

82SCORE

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1.1 The Problem

Traditional scoring methods blatantly ignore the unsecured consumer credit analysis. Today, 2.93 billion

people are unbanked, meaning that 38.5% of global population are fully deprived of banking services,

and only 42% of the banked population is labeled as eligible for lending [1].

Even in the US, one of the most developed countries in the world, there are 51 million underbanked adults.

In California, which is also one of the richest states in the US, the underbanked and unbanked constitute

up to 25% of the population. The situation exacerbates for the black and Hispanic communities, with 53%

and 42% respectively unable to fully participate in the economy due to lack of access to certain financial

services. In total, there are believed to be up to 40 million Americans using expensive payday loans to

meet some or all their financing needs [2].

Meanwhile, credit scoring is in true need of a data revolution per se. Banks build their financial scores

bases on track records of their customers, which hinders the process of discovering the real characteris-

tics of the customers and contains the data within their ecosystem. Since data requires significant privacy

to maintain, their degree of freedom is limited to their custom database. Even if these databases can be

congregated under certain institutional efforts, it cannot reach a level of inclusiveness and dynamism

that can be reached via Colendi’s architecture. Colendi aims to attend to this problem, where low-in-

come parts of developed countries, majorities of underdeveloped countries that are not involved in the

conventional financial services.

Building a credit scoring technology that uses machine learning algorithms, Colendi will nurture the most

relevant and comprehensive credit scoring platform in the history. Built on the Ethereum blockchain,

evaluation transparency, security and user data privacy are the key principles of Colendi.

FinTech is adapting Blockchain technology

to provide solutions to chronic problems of the finance.

And the next to solve is

“Access to Credit”

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1.2 Previous and Related Work

The need for blockchain-based credit scoring methodologies and decentralized ID systems has already

been partially addressed by several entrepreneurs in the field. However, no project has yet to offer a

holistic solution that also includes a risk assessment algorithm part to the issue of credit scoring that can

serve as a financial passport, hence enabling microcredit markets for everyone through our platform.

In general, Colendi interacts with three areas:credit scoring, ID platforms, and blockchain-based lend-

ing. The latter two are not the main focus for Colendi, hence companies such as uPort, Civic, Ripio Credit

Network, and SALT are seen as potential partnerships rather than competitors.

Related work on credit scoring has multiple predecessors, including Tala and Bloom. Tala is an older,

non-blockchain organization, while Bloom, on the other hand, has the greatest similarities to Colendi and is

mostly perceived as a competitor. However, Colendi does not concentrate on lending as a whole, but rather

focuses on specifically tailored microcredit markets according to consumer needs. Colendi was in the plan-

ning since 2015, as the idea and core team had already matured before blockchain had become mainstream.

There are surely other noticeable projects and solutions to serve the addressed market and Colendi’s

vision is federating key partners in matching cases to create a more inclusive environment to leverage

financial services.

2. Protocol Mechanism

Colendi protocol is designed for an easy user experience. Although quality scoring requires a complex

product development process, we aim to simply the end product to work within the conventional logic of

demand/supply behavior but simplifying the process extensively for our community.

Borrower Lender Data Partner Data Integrator

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2.1 Borrowers

Borrowers constitute the demand side of Colendi ecosystem, thus being an indispensable component of

our protocol.

Persona

Individuals or small businesses that need short-term financing. Active participants in the local economy

who need capital to expand their businesses. Involvement in “formal” credit markets such as bank loans

are little to none.

Incentives

• Demand for quick capital with reasonable rates.

• Staking rewards (see below).

Token Usage

Although Borrowers are not obligated to stake tokens, staking will help maintain an active user profile

and increase Borrower eligibility and Colendi score when the provided user data would not satisfy mini-

mum supply side requirement demands. Colendi tokens will not be used as collateral for compensation of

the lender in case of a fraudulent behaviour by the borrower. Borrowers may rather be asked to present

alternative tokens as collateral that will act as a positive variable in the scoring function. The required

number of tokens to be staked will be subject to variation depending on the credit score of the borrower.

There are four vectors for achieving a complete microcredit cycle through Colendi protocol. These are

simply demand, supply, distribution, and data vending in order to solicit our machine learning algo-

rithms. These four vectors can be grouped as given below in detail.

BORROWER

ACCESS TO FINANCE

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Nevertheless, for individuals that are unable to afford any tokens due to lack of access to any banking

services, Colendi will seek partnerships with data-rich non-profit organizations, providing tokens in ex-

change for leveraging its knowledge of local inhabitants’ needs and loan worthiness to facilitate efficient

distribution.

Lenders constitute the supply side of Colendi ecosystem. Although Colendi does not solely serve as a mi-

crocredit platform, lenders will be an integral component of the ecosystem if there is demand for credit.

Persona

• Merchants that want to capitalize on the demand of short-term loans by reliable customers

• Microfinance lenders and P2P wishing to access new lending opportunities

Incentives

Score queries for lending purposes lets the lenders interact with the data service of Colendi. Lender

is restricted to view the credit score of the borrower, but can demand the supply side users to provide

certain categories of data to Colendi app in order to lend on a basis of scoring according to their liking.

Borrowers will be prompted to provide the necessary data to the app in order to be eligible for credit

from the corresponding merchant.

2.2 Lenders

COLENDINETWORKBORROWER LENDER

Queries will be initiated via user permissions and the lending party will be able to access the user score via Colendi App. Lenders may be the merchants themselves or any third party financier.

Token Usage

Thanks to Colendi’s scoring algorithms that operates on a comprehensive database, non-performing loan risks are minimized for the unbanked population and the potential number of borrowers is increased.

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2.3 Data Partners

Data partners consist of major companies looking to obtain more reliable credit scoring services. The

Colendi platform will launch with multiple data partners such as major telecom companies and retail

chains. These agreements will enable Colendi to expedite the development of Colendi scoring system by

providing access to a diversified set of databases.

The main objective is loading major datapartners as contributors to our project. Contributing data part-

ners are regarded as early system adapters, and will be rewarded accordingly. Certain number of Co-

lendi Tokens will be distributed to our data partners to bolster this relationship.

Persona

Companies with mass user data -telco and retail chain stores- that aim to create new revenue streams

by securely deploying their data for establishing a scored user base.

Incentives

• Generating revenue from the redistribution of the tokens charged on transactional queries.

• Staking rewards (see below).

• Accessing a new financial scoring technology that will provide a reliable benchmark for financing

more commercial activities as well as other business scopes.

Token Usage

A staking range will be determined for each data partner to ensure data quality. Successful scoring que-

ries are rewarded based on the contributed data from related transactions. Early data partners have the

potential to earn disproportionate rewards when they do useful work on the network.

DATA COLENDI PROTOCOL

DATA PARTNER

STAKETOKENS

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2.4 Data Integrators

DATA PARTNER

DATA INTEGRATOR

Data integrators also play a very crucial role for our community’s quest to reach success. Assumption

for number of data integrators is primarily subject to the number of countries. Initial assumption is that

Colendi will spread to 50 countries with an average of 300 integrators within 6 months. The reward and

punishment mechanism will be fine tuned to keep an active and loyal data integrator network that will

extensively shred the efforts required by the Colendi team to realize the aimed distribution.

Persona

• Small financial technology firms that use Colendi’s tools to integrate data partners and merchants

into Colendi network. These constitute of local payment integration companies that work as vendors

or seek to generate extra income over referral programs.

• Microfinance lending organizations and agents.

Incentives

• Source of income through redistribution of the tokens charged on the transactional queries of inte-

grated merchants.

• Staking model will also apply to integrators.

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3. How will Colendi protocol work?

Network Growth Maintain HighQuality Data

Privacy Protection

3.1 Identity and Scoring

Colendi protocol introduces a solid method for financial scoring. It covers several layers such as ID crea-

tion, data integration, score evaluation, queries, and active token distribution.

ID creation is the first layer of Colendi protocol. Through Colendi mobile app and other integrated plat-

forms, users create their Colendi ID by providing identity parameters and complementary information.

Access to identity parameters is only possible by the data providing user, making Colendi ID a secured

layer within its network.

Borrower Lender Data Partner Data Integrator

Token Usage

A staking range will be determined for each data partner to ensure data quality. Successful scoring que-

ries are rewarded based on the contributed data from related transactions.

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Data provided by users (smartphone and social media) and partners (mass data providers) is positioned

anonymously on end-to-end encrypted decentralized data storage systems. It is not possible to relate a

data segment with user’s ID parameters. Each data segment is only accessible by respective data pro-

vider and Colendi. Colendi is not authorized to edit the data. The hashed signature of the data is kept on

Ethereum blockchain.

ID creation is the first layer of Colendi protocol. Through Colendi mobile app and other integrated plat-

forms, users create their Colendi ID by providing identity parameters and complementary information.

Access to identity parameters is only possible by the data providing user, making Colendi ID a secured

layer within its network.

Data provided by users (smartphone and social media) and partners (mass data providers) is positioned

anonymously on end-to-end encrypted decentralized data storage systems. It is not possible to relate a

data segment with user’s ID parameters. Each data segment is only accessible by respective data pro-

vider and Colendi. Colendi is not authorized to edit the data. The hashed signature of the data is kept on

Ethereum blockchain. Data providers are automatically rewarded with Colendi Tokens based on corre-

sponding Colendi Score queries. Every step of fund exchanges is also added on the blockchain to carry

out instant updates on the Colendi Score of respective users.

Private data based on end-to-end encrypted decentralized data storage systems is scored by Colendi

Scoring Engine and algorithms. Data segment’s weight on the credit score changes dynamically, as Co-

lendi consolidates more credit history data. Transaction logs, smartphone and social media data, user

inputs and Colendi credit history is evaluated to print a financial score for each user. Gathering credit

history data includes all details regarding transactions and repayment performance.

3.2 Contirubtion-based reward mechanism

Colendi provides a complete system for shopping-based microfinance lending as an initial use case. Through

Colendi App or other payment partners, users will have the opportunity to complete their payments with the

microcredit defined via Colendi scoring service. The only requirement is having a Colendi Score.

Merchants and lenders will access Colendi Score through queries in Colendi Protocol. The process will instant-

ly take place over smart contracts. The merchants/lenders will pay for score query fees. The fees will not be

charged with Coledi Tokens, and any other coin that is supported by Colendi wallet will be accepted.

The number of redistributable tokens will be calculated at the time of the query. Participants will be rewarded

via their corresponding contribution for the respective score query once network costs are deducted. The

number of tokens that will be redistributed as incentives will decrease at a diminishing rate according to Co-

lendi’s network growth slope.

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3.3 Rewarding of early adaptors

DATA

REWARD

DATA PARTNER

Colendi has reserved a portion of its tokens for community development for its awareness that early inte-

grators are one of the most fundamental components of building a successful user base. The rewards will be

distributed on a basis of diminishing returns that resembles an increasing mining difficulty structure. [4]

Data providers (partners and integrators) will be rewarded with Colendi tokens for each successful score

query according to their respective contribution. Rewards will be distributed at a scale of diminishing

returns to promote early adaptation for acquiring pioneer data partners and integrators. Although mar-

ginal returns decrease as a function of network growth, cumulative earnings does not necessarily need to

follow a parallel track as considering expanding user base may secure a greater share of the remaining

rewards for data providers.

The reward mechanism for data partners works as a function of their contribution to the user data on

scoring. Number of users covered, data history, dimensional coverage and data quality are the key pa-

rameters affecting the related token amounts they will receive from scoring queries. This mechanism is

designed to strongly promote a qualified data contribution. In other words, the higher the data quality,

the greater the rewards. Each lending activity corresponds to a score query, allowing data partners to

secure significant sums from our reward structure.

Each integrator will be rewarded based on the number of merchants they onboard to the Colendi Net-

work and respective size of these marchants regarding their level of activity. Colendi will never allow an

enterprising mechanism that resembles a ponzi scheme. All integration cases will be evaluated sepa-

rately and in details to maintain the proper global system expansion.

3.4 Staking

A staking mechanism is used to assure data quality in concert with Colendi’s quick growth by securing

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data standards and encouraging long-term partnerships. Data providers and integrators are expected

to be chief beneficiaries of staking. Their main objective is complying with our quality standards about

data integration. The Borrowers will also participate in the staking mechanism, especially at the initial

phase of the network in different countries. In the Colendi token design, the actors that are going to be

staking the tokens are:

• Data Partners

• Data Integrators

• Lenders

• Borrowers

The economic implications of the staking mechanism will affect the velocity of the token. We also believe

that as the network grows, the demand for tokens will increase via newly attracted lenders, which will

and multiply the number of queries and have an incremental effect on token usage. Staked tokens will be

locked in the smart contract and released back to the stakers after the end of the staking period stated

in the smart contract. Any misleading action during the period of staking will be compensated through

these tokens.

Since these actors will be verifying the quality of the data, the system will be able to reward/penalize their

input through staking by either allocating a certain amount of the service price that is paid by the Lenders

as a reward or compensating affected parties with the staked tokens as a penalty. Beneficial actions will

be incentivized through rewards and malicious actions will be penalized with the loss of staked tokens.

The Role of Borrowers in Staking

Users will stake tokens in order to vouch for other users and get rewarded by the end of the staking peri-

od. Staking by borrowers will contribute to constitute a higher Colendi score. In the case of users with low

scores and narrow data, staking is also an option to provide access to funding in accepted cases.

The Role of Lenders in Staking

Lenders will be required to stake for accessing Colendi Protocol. They are not allowed to collateralize

staked Colendi Tokens.

The Role of Data Integrators in Staking

A certain number of tokens will also be staked by integrating merchants to stay in the system for a prede-

termined time span and assure high quality contribution and a committed integration progress. In case

of malicious actions by data integrators, their staked tokens will serve both to punish those actors and

compensate the losses incurred.

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The Role of Data Partners in Staking

Data Partners will be the main stakers in the system. Integrity of the data is of uttermost importance to

the system and data partners will be the sources of mass data. The tokens staked by the data partners to

guarantee the quality of data will constitute most of the staked tokens.

Once the data quality is assured for all parties (borrowers, data partners and integrators) to secure full

penetration of merchants and users into the system without malicious actions, staked tokens will be re-

leased.

3.5 Slashing Conditions

Slashing conditions, rather knows as Minimal Slashing Conditions, is a crypto-economics concept intro-

duced by Ethereum founder Vitalik Buterin. It is derived as a function of security to achieve “economic

finality”, which is briefly defined as follows:

“A block B1 is economically finalized, with cryptoeconomic security margin $X, if a client has proof

that either (i) B1 is going to be part of the canonical chain forever, or (ii) those actors that caused B1

to get reverted are guaranteed to be economically penalized by an amount equal to at least $X.” [5]

This penalizing mechanism for violating parties acts an extra safety measure for proof of stake that is

named as slashing conditions.

Colendi slashing conditions are developed to protect each party as well as the protocol against any im-

posture and privacy violating act. Following are the categories that will activate slashing conditions for

Colendi protocol:

• Data integrator fraud

Data integrator rewards will be staked until corresponding merchants are deemed valid by Colendi fraud

engine. Integrators are responsible for the accuracy of the data provided by data partners and mer-

chants they integrate in Colendi network. Integrators will also gradually be slashed depending on the

discordant performance of merchants.

• Data provider errors and frauds

Data providers are responsible of providing relevant and necessary data. In case of data errors that

may lead to unintended scoring for users, data provider rewards will be slashed according to terms to

be defined by Colendi.

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In terms of data fabrication to increase/decrease certain scores intentionally or other misleading data

contribution, data providers will be slashed. Since staking is necessary for data partners of Colendi net-

work, the violation will result in appropriation of a certain amount of tokens in accordance with the ratio

of misalignment. Auditing will be demanded by Colendi in case there is a flagged mismatch vis a vis

Colendi’s own scoring excluding the data provided by a data partner.

• Borrowers fail to repay the finance

In case the borrower is expected to stake funds or tokens as collateral, Colendi will provide the necessary

mechanism for the borrower to stake other tokens or funds as collateral. The staked tokens will be frozen

in the corresponding node, which will cause the tokens to be slashed if borrowing party is to fail the pay-

ment in time. The number of slashed tokens will increase parallel to the duration of delay, while lender

may define terms. All tokens will be slashed only if the borrower should fail to pay the minimum required

payback that is also determined by lending party. Additionally, in case there exists a third-party vouching

for the borrower’s repayment, they will be slashed to compensate for the losses incurred by the lender.

• Lender fails to deliver the credit

Lenders are technically allowed to go under the required %10 minimum deposit rate. This will trigger the

slashing condition for lenders and any lender that violates this condition will be slashed from their staked

tokens.

3.6 Future Work

As Colendi network matures, it will ensure the quality of the data and prevention of bad actors through

a decentralized attestation platform. This platform will serve as an arbitration system between different

actors in the network and the platform will be managed by a decentralized governance mechanism. All

actors in the system might become attesters in the platform. This attestation will be useful in assessing the

quality of the credit history, social network background as well as other types of data inputs that Colendi

Credit Scoring Algorithm will draw from to provide the credit rating score. At the genesis of the platform,

Colendi will act as a referee to solve the potential problems that will arise between different actors. The

decentralized arbitration system will involve detection of bad actors, user flagging of bad behavior and

arbitration by legitimate panel including data partners, integrators, lenders, and borrowers.

Currently, Colendi Foundation makes the judgement call on bad actors, releases reports with full trans-

parency with respected user privacy. But it will be a further improvement for the network to having a

decentralized inspection mechanism. Colendi aims to work with private regulators and most prominent

auditors in the world to achieve the highest possible precision, consistency, and data security, yet Colen-

di’s own network will be the primary drive for mass adoption.

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Colendi is also open to the idea of collaborating with the most prominent digital ID platforms on the

blockchain to build a more holistic profile for the people. Many visa issuance processes require present-

ing proof of funds, and Colendi’s vision is to eliminate this inefficient procedure that fully converges with

the rationale of eliminating passports through building digital ID platforms on the blockchain.

Non-Profit organizations that seek to bring microfinance to underdeveloped countries pose great po-

tential for partnerships for data integration and expansion of user reach. Colendi sees immense value

in partnerships with nonprofit organizations to increase their capabilities regarding realizing a more

inclusive microcredit issuance for citizens of underdeveloped economies.

Finally, we also believe in a decentralized world where banks will need to adopt to the new normal by

decentralizing their databases. Colendi is open to the idea of collaborating with banks to include them

in our alternative credit scoring approach. We do not necessarily believe that decentralization will erad-

icate conventional banking, but rather lead them to open up to new developments in financial services,

and that is where we see the opportunity to cooperate.

InstallmentShopping

Micro Finance

Peer to PeerFinance

Financial Reputaion

4 Use Cases

4.1 Installment Shopping with Colendi Score

Colendi users will be able to pay their shopping with installments in Colendi integrated retail shops. At

first, they should sign up to Colendi application and create their ID and get their score by data access

permission, and then use their application at check-out to approve lending if their scores are sufficient.

They will repay installments either through that shop or paired payment service provides. All their Colendi

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transaction details and repayments will be added as a data dimension, and all of them will affect users’

Colendi Score.

Installment shopping is initially planned to have the financer as the merchant itself, therefore no 3rd party

lender is needed for this financing case. This is basically the digital alternative for the conventional use

case, where merchants provide shopping with installments opportunity to the customers they know and

trust. Hence, this option stays exclusive to this particular customer group. Colendi proposes an objective

alternative to transform this approach, which will not only build a greater customer base for the mer-

chant but also provide the customer with the necessary means to access microcredit for shopping.

4.2 Microfinance

Like installment shopping, users will employ their Colendi Score to finance their shopping at the integrat-

ed merchants, however, instead of the merchant itself, a 3rd party institutional lender finances the shop-

ping event for this occasion. Merchant receives the payment from the lender, while Colendi score and ID

are accessed by a 3rd party lender via Colendi Protocol. This way, even the centralized institutes such as

the banks will participate in our decentralized network as lenders for being able to penetrate the micro-

finance market. It is also in Colendi’s plans to team up with reputable organizations that currently work

on enhancing and expanding microcredit. Whether they are non-profit or for profit, Colendi prioritizes

signing partnerships to provide finance to the unbanked in a legitimate and efficient way.

4.3 P2P Financing

As our user base expands, in addition to institutional lending, P2P lending will also be introduced as a

complementary method. Users will be able to finance their shopping list through Colendi mobile applica-

tion, but this time from individual lenders. Token compensation for queries will be provided by the lending

part. By contributing to this process, both sides will get certain benefits for building a more decentralized

community and putting the underutilized savings into use.

Colendi also aims to improve the P2P financing platform to such a point, where users can lend their ex-

cess credit they are entitled to deploy via third parties, as the trust system establishes.

4.4 Colendi Score as Financial Reputation

Any business can use Colendi Score as a score query and reputation metric, while integration into 3rd

party applications can be done at ease. Global platforms such as Uber can make queries for potential

drivers, while Airbnb house owners may want to see the financial stability of their guests. Carpooling ser-

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vices may establish an improved trust mechanism between their clients and customers, particularly in so-

cieties in which such services suffer from the difficulties for carrying out a viable KYC process to establish

the user trust. We believe that Colendi will contribute extensively for building a trustless society, and such

services that require high level of trust will present a great chance to expand Colendi’s scope of business

and use of Colendi Score. Each query is a part of Colendi’s tokenized operations on smart contracts and

fees will be applied on the party that carries out the score inquiry.

4.5 Colendi ID - Self Sovereign Identity

Considering the covering base of the Colendi ID, it is Colendi’s strength to have Colendi ID positioned

as an independent layer. The application scopes may vary through 3rd party system login processes to

other self-sovereign identity requiring applications, expanding the use and reach of Colendi Protocol.

Positioning Colendi ID as an independent layer to be integrated into other services or applications will

clearly leverage the integration process of Colendi Score in later stages.

5. Conclusion Finance has developed to a stage of saturation, while the threat of stagnation looms over the indus-

try. Banks cannot collect the necessary data to implement a financial risk assessment that overarchs to

greater parts of the global population. The exclusion of billions from financial services hampers the glob-

al economy from fulfilling its potential. The issue becomes even more crucial at a time when the global

economy is suffering from lack of growth, and most of the growth is generated through unproductive

investments, leading to more bad debt. Income disparity widens even further every day, leading to mas-

sive amounts of idle savings for the financially strong. All these problems create intrinsic risks for global

finance that is desperate to unleash the potential of the underbanked by becoming more inclusive, yet

the world is bereft of a reliable creditworthiness platform.

Colendi takes on this obligation by forming a valid financial score for individuals all around the world. We

are due building a decentralized database through not only the data provided by users, but also major

enterprises from the tertiary industry that is in grim need for creating more room for growth of their busi-

nesses. We aim to become the industry standard in our decentralized future.

Colendi network uses end-to-end encrypted decentralized data storage systems and Ethereum protocol

to construct a ‘trustless’ service that will radically transform financial scoring for the world. Colendi’s

technology relies on machine learning to constitute an unmatched dynamism of keeping an instantane-

ously up-to-date credit scoring database. Hence, users will be able access microcredit and installment

shopping at Colendi merchants.

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We are building an incentive system that will enable a sharing economy within the Colendi ecosystem.

We will gradually upgrade into wider scopes of financial services, primarily P2P finance. Nevertheless,

Colendi’s goal is to establish an ecosystem for the users to use Colendi for reputation purposes. A truly

global, decentralized and democratized financial passport for everyone.

Data Partners

Data Integrators

NetworkCosts

ColendiFoundation

Lender pays for score with Colendi token in lending process

Colendi Token Rewards

Score Contribution

Community

Colendi Score

Borrower LenderMerchant

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6. References

[1] The World Bank Group. Global Financial Inclusion Index, 2014. http://databank.worldbank.org/data/

reports.aspx?source=1228

[2] Haeslip, Matthew. “ Enterprise Case Study: Solving Underbanked Credit Scoring.” www.ovum.com, 30

Sept. 2016.

[3] Baer, Tobias, et al. “New credit-Risk models for the unbanked.” McKinsey & Company, Apr. 2013,

www.mckinsey.com/business-functions/risk/our-insights/new-credit-risk-models-for-the-unbanked.

[4] M. Ali, R. Shea, J. Nelson, and M. J. Freedman, “Blockstack: A New Internet for Decentralized Applica-

tions”, Technical Whitepaper Version 1.1, October 2017

[5] Buterin, Vitalik. “Minimal Slashing Conditions – Vitalik Buterin – Medium.” Medium, Medium, 2 Mar.

2017, medium.com/@VitalikButerin/minimal-slashing-conditions-20f0b500fc6c.