Participants

Borrowers

Borrowers, represented by self-employed, micro-businesses, and smallholder farmers, apply for productive loans from the marketplace, most often with the help of a local originator, and then repay the loan plus its price.

Originators

Originators facilitate access to the protocol by grouping several borrowers with similar needs and presenting project applications to the marketplace on their behalf. They publish offers to the loan marketplace by creating projects on behalf of the borrowers. The originators provide junior (first-loss) capital to finance the whole project or part of it. They can be:

• Local cooperatives, guilds or other community organizations formed by borrowers to gain better access to loans and to standardize their relationship with the rest of the participants in the ecosystem.
• Bitcoin circular economies using solutions such as Federated Chaumian mints, enabling access to micro-financing to their users.
• Telcos, retailers and gig-economy platforms that onboard and vet the users into their services and then facilitate their access to the protocol as an embedded financial service.
• Digital wallets and fintech providers that already offer financial services and that can expand to unsecured decentralized lending.

Trusted parties

Trusted parties assert facts about the borrowers in the form of verifiable credentials. They can be:

• The originator, issuing credentials for its members or users.
• Merchants, buyers, unions, chambers or other local organizations that serve the community or have knowledge of their members.
• Independent third-party data providers that can issue credentials related to the activity of the borrower and relevant to the risk assessment process, such as KYC/AML, account data, and on-chain activity.
• Financial health providers that publish educational materials and tools to help borrowers develop good financial habits and issue credentials that assert knowledge, skills, and accomplishments.

Capital providers

Capital providers allocate senior capital to the loan marketplace and delegate the actual lending activity to the originators in the form of senior tranches for the financed projects. They can be:

• Individual Bitcoin investors.
• Large institutional investors or digital asset managers.
• Decentralized finance protocols.