Colendi proudly to present the first version of Colendi Tech Paper, which encompasses the problem at hand and the Colendi vision as well as the basic technological features with detailed explanations.
Colendi Tech Paper is designed to describe the technicalities of the Colendi Products. As we have covered before, Colendi is a protocol that is built on the Ethereum Blockchain, with an ERC20 Colendi Token; therefore, the technology faces the challenge of changing the credit scoring and microcredit methods in the finance sector. Every step along the way, Colendi realizes the need to lay down the foundation for its applications looking for epochal ideas and reliable solutions.
Since the initiation of the Colendi Project, open source programmers all around the world and new projects in the blockchain environment were constantly offering increasing amounts of new innovations. These new discoveries and developments not only enabled the adaptation of new concepts by the ecosystem players, they also broadened the visions and their respective implementations. In other cases, they created some fresh possibilities for existing projects. Colendi has embedded some of these innovations in its protocol to create the best user experience with minimum liabilities.
Besides following a very strict schedule to issue the long-awaited Colendi tokens built to support the products, Colendi team has also been working to enhance the technical aspects of the Colendi Products. The pace of innovation in the blockchain ecosystem and Colendi’s vision serves as a compass to open up the project to the most advanced, groundbreaking developments.
For the last couple of weeks, Colendi team compiled the latest technical developments and has completed the fine-tuning of its products. Below we explain briefly each of these Colendi components.
For identity, we decided to use ERC-725, an existing decentralized identity standard with its complementary identity claim standard, namely ERC-735. Storing users’ personal data is handled via a Secure Object Storage(SOS), facilitated by Colendi. Processing this personal data is executed through the Secure Computation Environment(SCE), based on multiparty computation.
Colendi ID, which is a self-sovereign identity, is completely controlled and managed by the owner. Integrating ERC-725/ERC-735 into the network design is relatively straightforward. Upon registration Colendi App, the user will be prompted to either create an identity, or link their existing identity. This ERC-725 identity will then serve as an identifier on Colendi’s network. Other actors on Colendi Network may also leverage ERC-725 to provide a form of identity. Data partners, integrators, potential lenders, merchants, and third-party scoring algorithm developers can create their respective identities to represent themselves while interacting with users.
Secure Storage and Computation
At Colendi, we have serious financial data collected from our integrated partners and personal data – including credentials. Keeping this significant regulation in mind, we are implementing a storage and secure computation mechanism which is completely GDPR-compliant. The storage mechanism is a very common workaround solution. Personal data is stored off-chain and references to this data are kept on the blockchain or on a Secure Computation Environment. We also have to guarantee that there will not be any information leaks while making computations on data. Thus, we will present two external protocols: one for storing data and another for performing secure and reliable computations on this data, Secure Object Storage and Secure Computation Environment, respectively.
We believe that Colendi primarily adds value by guaranteeing data sovereignty and privacy for the user. For this reason, we propose a solution built on top of SCE for computation and parameter-hiding purposes, while choosing SOS for an end-to-end encrypted storage solution to provide a secure and decentralized protocol. Please refer to the tech paper’s related sections for further information and functionalities about SOS and SCE.
Individuals are turning into data, and data is becoming a center of power. In order to make accurate lending decisions about users, we must collect relevant information from this expanding data. However, relevant information can only be mined from well-targeted data sources. For example, while the amount of daily water a person drinks is not a factor that affects the score, the duration of their phone conversations may have significant relevance. During our research, we have determined three data sources that affect the credit score of a user:
- Mobile phone data
- Social media data
- External data partners.
It is crucial to consider mobile phone and social media data, particularly for unbanked and underbanked people, since we spend more time on our smartphones and share more data than ever on our social media accounts.
Colendi Score is the universal credibility measure of each Colendi user. It states the creditworthiness of a user, which provides a viable risk analysis tool for lenders to reach a decision whether to issue microcredit. Each Colendi Score is bound to a corresponding Colendi ID. Colendi Score for each user is stored on SCE, as with Enigma’s secret contract. The contract includes a mapping structure which takes the Colendi ID of the user as a key and the corresponding score as a value. This contract can only be updated by the nodes on the SCE network.
Colendi proposes an algorithm based on the paradigm that people of similar financial repute tend to connect with each other. As already mentioned, this paradigm is the outcome of academic studies on behavioral economics and data science. Additionally, we are conducting tests on a dataset that proves the viability of our novel algorithm
What Colendi offers has always raised interest with its eye-opening solution to global problems. Various partners, contributors and project fans understand that a successful Colendi Project means a more fair credit environment globally, a vision that is set to enable the discredited billions. However, possessing simply a vision is not satisfactory especially accompanying know-how and vast understanding of the base technology are left out. Colendi team aims to achieve their objectives by adopting the technical features and principals indicated in this Tech Paper.