Create a trustless system for undercollateralized loans by implementing a credit score system.
Saké aims to create a credit score system for AAVE's credit delegation platform to solve the problem of undercollateralized loans in a trustless manner. The credit score is represented by an ERC20 token which has to be staked for each loan. The amount of credit tokens staked in a loan contract will impact directly the rate of under-collateralization. In other words, the amount of Credit tokens staked in a loan will determine how many times of your collateral you can borrow. The ERC20 token can't be managed directly by the users. Therefore, the tokens are non-transferable between users since the notion of a credit score --which they represent-- is non transferable as well. Each loan determines how good or bad the payment process has been in terms of profits for the lenders, and compliance with the terms of the loan. At completion time, the loan contract will then mint or burn Credit tokens for the borrower depending on the previous assessment.
How it's made