Borrowers

Anyone can be a borrower. Borrowers simply pay a network fee and a pool creation fee (in $RZR) to create a borrow pool.

Establishing Borrower Credibility

To establish credibility, borrowers can provide:

1. On-chain credit scoring

2. A credit profile

Credit Score

Combining on-chain and off-chain data, borrowers and lenders may use credit profiles obtained from third-party reputed credit profilers in crypto. Borrowers may then share a specified credit summary to help establish credibility with lenders.

Credit Profile

In addition, borrowers have the ability to create and bolster their creditworthiness on RaiseR by creating a profile for each borrow. This is done by:

• Providing a brief description of who they are.

• Providing links to their socials (Telegram, Discord, Twitter, email) such that prospective lenders are able to query the claimed identity in those channels independently.

• Verifying ownership of claimed assets. $^{1}$​

• Posting collateral while creating an issuance.$^{2}$​

$^{1}$: It may be that a borrower has multiple (unhosted) addresses with various assets (assets which they do not want to necessarily pledge as collateral). A borrower is sent an on-chain signature verification for the claimed address. When it is signed, the address is marked as owned by the borrower.$^{*,**}$​

$^{2}$: When creating a borrow pool, borrowers will have the ability to (optionally) post collateral (of any asset) to their proposed issuance. They are not obliged to do this. However, lenders will be able to browse pools based on whether they are collateralized or uncollateralized. All collateral posted will be reserved until the maturity of the borrow. If the borrower repays its obligation, the collateral will be claimable by the borrower. If the borrower does not pay back its obligation, the borrower is deemed to be in default and the lenders, on a pro-rata basis, will be able to claim the collateral. In case the collateral is an NFT, it will be auctioned off with the proceeds payable to the lenders. There is no mark-to-market or liquidation risk for any collateral posted.

* Note this does not necessarily provide any guarantees; assets can move from addresses at any time. Equally though, it provides insight into the borrower’s holdings and velocity of asset transfers, if any. A lender is able to investigate this for their perusal and make their own judgements.

** The ability to post any asset as collateral, without concern for its underlying dollar value, will enable nascent on-chain entities, without established markets for their proprietary tokens, to more readily access credit.

Creating an Issuance

In order to create an issuance, borrowers will need to fill out information such as:

• Subscription Start Date & Time: Indicating when they would like the pool to open for lenders to subscribe.

• Subscription Period: Indicating how long they would like for that pool to remain open for subscriptions.

• Borrowing Period: Indicating for how long they would like to borrow capital.

• Min Borrow Amount: Indicating the minimum amount they will accept for the borrow to be successful. If this amount is not met within the Subscription Period, the lenders who have committed capital are able to withdraw their commitments.

• Max Borrow Amount: Indicating the maximum amount the borrower would like to raise. If this amount is met at any point during the Subscription Period, the borrow will be successful and no further commitments will be taken.

• Borrow Rate: The interest rate the Borrower is offering to pay.

After Pool Creation

Once a borrower has completed all the steps to establish a credit profile, they can supply all the relevant information to create a pool. A given pool can exist in any of the following states:

Pre-Subscription

Once a pool is created by a borrower, and if the Subscription Period has not commenced immediately, the pool is said to be in a Pre-Subscription Period. During this time, the Borrower retains the right to either cancel the pool or edit the pool parameters. However, they can only increase (but not reduce) any collateral.

Active Subscription

During this time, lenders are able to subscribe/commit funds to the pool. Borrowers are still able to cancel the pool, but only if the minimum borrow amount has not been reached. If the pool is cancelled, lenders will be able to reclaim their commitments immediately.

Funded Pools

These are pools that were successfully funded. During this time, Borrowers are able to deposit bonus payments of any single token, multiple times. The addition of bonus payments would be expected to influence trading in the ZCB Market.

Expired Pools

Expired Pools are the collection of borrowing pools that were either Funded or Unfunded historically.

If a pool was Unfunded, it implies the borrow was not successful and no further action was taken.

If it was Funded, it was either fully repaid, or is in the current status of “Grace Period”. A Grace Period is a small period of time beyond the borrower’s deadline to repay, to account for any logistical issues in repayment. A borrower is only considered to be in default if it has not fulfilled its obligations by the end of the Grace Period. Once a borrower has their pool successfully funded, the borrower is able to withdraw the funding and is only obliged to repay by the end of the Grace Period. During this time, lenders are able to keep a tab on the borrower through either monitoring any Verified Ownership addresses, or by engaging in the borrower’s communities (if any), and more directly, through participating in the ZCB market.