Coupube · Bringing Ethiopia's Equb Community Lending On-Chain | Web3 Pitch Ethiopia

0:00AI’m going to present to you about a project I’m really excited about. And I hope by the end of the presentation, everybody will be excited too. So -- oh, OK. So I was more focused on the technical side, so I didn’t prepare a very nice presentation. But you guys have a very nice presentation. Huge shout out to you. No pressure. So what’s ECOBE? It’s a cube on-chain. I call the name EthCube. And what it does is it’s an on-chain reputation-based undercollateralized community lending. And I’m gonna walk you through the details. So what’s EthCube? Maybe like for foreign people who are not familiar with Ethiopian culture, EthCube is a traditional financial system here.

0:00ASo let’s say you want to buy something and you don’t have the money. So you collect your friends, and you say, like, let’s chip in this amount of money every month. And the guy who did the organization takes it for the first month. And for the coming week, they do, like, a draw, and the one member wins the pooled funds through a draw. And it would continue until everybody gets their money. It’s kind of peer-to-peer lending and credit system. So what’s the problem with this already existing traditional system? You might be thinking this is like the perfect financial system I ever saw, but I think there is still a problem.

0:00AThe first one is the funds are stored in someone’s pocket, and they’ll be distributed every month. Like every month they’ll pay for a guy, and he distributes it to the winner. And when you’re doing something like this, you only know like few people. For example, I want to do it with Kokab, and I know her, but she want to invite her friend. I don’t know their friend, but she knows them. So there’s some trust issue. Maybe they are good. I’m sure she has good friends, but you don’t know. And the third one, the luck could be manipulated. Every month they do a draw, and that luck could be manipulated.

0:00AAnd most importantly, it cannot be scaled to a lot of people. It’s only in the community. So my solution is a decentralized ECOOP. Where people interact with smart contracts, and we do the raffle using a verifiable random oracle. But there is a huge problem here. How do you ensure other people will pay back? And like, generally in DeFi system, there is like a lot of lending protocol, and they have different solutions. So I thought maybe I can take the solution from them. So the first one is like having collateral. People do like, even my friends earlier, like they did a project, Stake, for example, some ETH and you take USDC.

0:00ABut in this situation, the person does not have any money. He wants to take some money and he doesn’t have any collateral. So we cannot use collateral. Or we can have somebody else to stake money for him and then he can go through the -- but in this case too, if he has a friend who can stake that money for him, why don’t you lend him? Like, why do you want to use this like community saving? So So like, I was very sad. I have this idea called Gobind, I want to bring it on-chain, and like, I tried these solutions and it didn’t work, and I was going to give up.

0:00ABut something happened. I came up with something called on-chain reputation-based credit system. So you might be thinking, what’s on-chain reputation? On-chain reputation is like, when you are doing transactions on-chain, you’d get some kind of points. because you are an active user of that chain, and that would make you like a trustable person. And I also read some related material on the subject. There is, for example, PageRank and HODL Rank on Ethereum Transactions: A Measure for Social Credit. So they tried to do the PageRank algorithm used in Google, and they’re gonna rank users using their public key. and they’re gonna give them a credit system. Also in the paper, they discuss like there is 1.7 billion people in the world that are unbanked, and while 44% of the banked population, they’re not eligible for credit, and that makes up 72% of the whole world.

0:00ASo on the paper, for example, they discuss transaction weighting mechanism. This means like if you receive more money, than you spend on-chain, like you may be more trustable because you have a lot of money. Or it could be time-based weighting mechanism. If you, if you are really active on the blockchain recently, it means like you are actually using the chain and you can be rewarded for it. And value-based weighting, it could be like how much money you have in your account. So I try to create an on-chain credit and it uses like transaction history, maximum amount, referral point. Also in a referral point, people who have like huge amount of money, they can refer for you.

0:00AAnd if you fail to complete a group, they would lose point, also you lose point. So yeah, I’m also planning to integrate AI for the project. But while I’m doing this, I found a hidden gem in this project. I don’t know if you noticed, but there is one important thing that came up after I kept working on it. And that is bringing value to Ethereum or any other chain. So for example, I want to send him $100. I can send him $100 on Revolut. Like, it doesn’t take any fee. But if I send him on Ethereum, he would get some credits. He can then in the future, he can join like a credit system because he he accumulated some credit by doing an on-chain activity, and users will be rewarded for using that chain.

0:00ASo also, I did some research if there is something like this, but there are not currently no widely adopted on-chain reputation-based DeFi lending protocols. So I think it’s gonna be challenging. And further integration, I’m also planning to do like a cross-chain interoperability so that people can bring their credit from one chain to another. I’m also thinking maybe in the future to integrate zkTLS. It’s a zero-knowledge transport layer security where you can interact from Web2 to Web3 in a secure gateway so that people can also bring their off-chain creditability. And I’m also integrating maybe Wildcoin to prevent some