Challenges

Regulatory compliance

Lending services are regulated everywhere in the world. DeFi protocols providing lending services have succeeded in achieving regulatory arbitrage. The Growr protocol will aim to strike a balance between covering regulation at the “last mile” of consumer financing depending on the jurisdiction and the locally residing stakeholders through which the protocol services are delivered, and the supranational decentralized space outside of the reach of traditional regulators.

Credit risk assessment

While we plan to leverage verifiable credentials from traditional credit bureaus, we envision a future with more decentralized credit risk assessment based on alternative data sources. This is mostly uncharted territory and may lead to lower yield for investors or even losses due to incorrect calculation of the cost of risk.

Fraud

We expect that such a protocol will be a high-interest target of fraudsters. We will work on developing the right anti-fraud measures including permanent blacklisting of users from accessing the protocol services.

Technology maturity

Some of the technologies described in this whitepaper are new and unproven at such a scale. We aim to leverage as much as possible the experience of other projects and to test different aspects of the technology stack via demo applications and pilots.

User experience

Setting up non-custodial Bitcoin, Lightning and self-sovereign identity wallets is still complicated for technically unsophisticated users. As part of the work on the Growr protocol, we will seek the most user-friendly implementations for accessing the protocol, including facilitating access through solutions such as self-sovereign identity agents, community custody and USSD interface.