Hi there! This repo contains the whitepaper for Janka, a credit score for DeFi that is fully transparent and decentralized!
In this repo you will find the following:
(1) "Janka_Protocol.pdf" -- Whitepaper for our Protocol
(2) "whitepaper.tex" -- Raw LaTeX file used to generate our whitepaper
(3) "p85.png" -- simulation of Janka score with 85% probability of repayment
(4) "p15.png" -- simulation of Janka score with 15% probability of repayment
(5) "splitprob.png" -- simulation of Janka score with 85% prob good first half, 15% prob good on the second half.
If your name is Huma Finance, and you are reading this README file, we'd also like to let you know that we are submitting this whitepaper for the "Build new signal adapters" bounty!
Janka Score produces a signal about a borrower's creditworithiness by tracking the probability of a borrower, given by a wallet address, to return capital and keep loans healthy on DeFi lending protocols. At the time of ETH Denver, this only covers AAVE V3 on ethereum, however this could very quickly be expanded to cover many other protocols accross multiple chains.
In this paper, you will be introduced to what to Janka Score is, why decentralized and transparent credit scoring is important, why optimistic attentations keeps our score secure, detailed descriptions on the math behind our score, reproducable analysis on how we selected our initial model parameters, additional applications of the Janka score, and future plans for Janka.
We believe the Janka Score has the potential to become a powerful web3 native signal adaptor for not only Huma Finance, but the broader DeFi ecosytem and beyond. For the first time, DeFi lending protocols will be able to rank and gauge the risk of DeFi borrowers in a transparent way. This has the potential to dramtically improve the quality of the underwriting process of DeFi loans by allowing lending protocols to offer better tailored lending terms and increased capital efficiency based on a borrowers Janka Score. We believe the Janka Score has the potential to set a new standard for credit risk assesment in Web3, and empower the 99% with the benefits of capital efficient lending in DeFi.
We hope you enjoy reading our paper, as much as we enjoyed writing it. Thank you!