Under-collateralized loans backed by reputation.
In TradFi, consumer lending is a trillion-dollar market, while DeFi lending remains limited to a billion-dollar market of over-collateralized loans. This model is fundamentally broken: requiring borrowers to already have capital creates inefficiency and slows adoption. Unlloo introduces reputation-based borrowing in Web3, enabling under-collateralized loans by leveraging on-chain identity and reputation to assess creditworthiness.
Unlloo is an EVM DeFi protocol for under-collateralized loans backed by reputation. It enables borrowers to access loans based on their on-chain reputation score, while lenders can earn interest by providing liquidity to the protocol.
The protocol features:
Reputation-based borrowing: Loan eligibility and limits are determined by on-chain wallet activity
Liquidity pools: Lenders can deposit assets and earn interest
Admin approval system: Loan requests are reviewed and approved by administrators
Multi-chain reputation: Analyzes wallet history across Ethereum, Arbitrum, Base, Avalanche, and Optimism
Unlloo is built on [Scaffold-ETH 2](https://github.com/scaffold-eth/scaffold-eth-2), a development framework for building dApps on Ethereum. The system consists of three main components:
The core protocol logic is implemented in Solidity smart contracts:
Loan lifecycle management (request, approval, borrowing, repayment)
Liquidity pool management
Interest calculations (compound interest for borrowers and lenders)
Price oracle integration for USD conversions
Protocol fee management
A Next.js application built with Scaffold-ETH 2 that provides:
User dashboard for reputation display and loan management
Lending interface for liquidity providers
Borrowing interface for loan requests
Admin interface for loan approval/rejection
Integration with smart contracts using Scaffold-ETH hooks
A NestJS backend service that handles:
Reputation calculation from multiple sources:
3rd party services (HumanPassport, zPass, Webacy, EthosNetwork)
Custom creditworthiness analysis using Blockscout API
Multi-chain wallet history analysis
Reputation aggregation and scoring
1. User connects wallet to the frontend
2. Backend calculates reputation based on wallet history
3. User submits a loan request with desired parameters
4. System admin reviews and approves/rejects the request
5. If approved, user can borrow from available liquidity pools
6. Lenders can deposit assets into pools at any time to earn interest
This is a Yarn monorepo containing three packages:
packages/
├── hardhat/ # Smart contracts and deployment scripts
├── nextjs/ # Frontend application (Scaffold-ETH 2)
└── api/ # Backend API (NestJS)
- Node.js: >= 20.18.3
- Yarn: 3.2.3 (package manager)
- Git: For cloning the repository
<h1>Overview</h1><p>Unlloo is an on-chain undercollateralized lending protocol. During this hackathon we shipped two</p><p>major milestones: a smart contract architecture redesign for size optimization, and a new</p><p>Guarantors Program that enables B2B credit partnerships.</p><h1>1. Extension Pattern - Smart Contract Size Optimization</h1><p>Solidity contracts have a hard bytecode size limit (24KB, EIP-170). As Unlloo grew in features,</p><p>the monolithic contract was approaching that limit. To solve this without sacrificing functionality,</p><p>we introduced the Extension Pattern.</p><p>Instead of one giant contract, the protocol is now split into:</p><ul><li><p>UnllooCore - the canonical state and core lending logic (loans, pools, repayments)</p></li><li><p>UnllooExt - an extension contract that handles auxiliary features and delegates back to storage through a shared storage layer</p></li><li><p>UnllooStorage — isolated storage contract, readable by both Core and Ext</p></li></ul><p>Both Core and Ext share the same storage layout, so state is always consistent. The proxy</p><p>(Unlloo.sol) routes calls to the appropriate implementation. This keeps each contract well under</p><p>the size limit while the protocol continues to grow.</p><p>Key benefits:</p><ul><li><p>Each contract stays within the 24KB bytecode limit</p></li><li><p>New features can be added as extensions without touching core logic</p></li><li><p>Upgrades can be scoped to only the affected module</p></li><li><p>Storage is decoupled, making audits and reasoning about state easier</p></li></ul><h1>2. Guarantors Program - B2B Credit Partnerships</h1><p>The Guarantors Program introduces a new way to expand credit access: companies can act as</p><p>guarantors for their employees, backing their loan requests on Unlloo.</p><h3>How it works:</h3><p>A company (the guarantor) signs an off-chain B2B contract with Unlloo and then registers</p><p>on-chain by simply recording their backing for a specific employee's wallet address. No funds</p><p>are locked upfront — the guarantee is a committed relationship, not a collateral deposit.</p><p>When the guaranteed employee applies for a loan, the protocol flags them as guaranteed. The</p><p>lender/admin can see this backing and approve the request with more confidence - potentially</p><p>at better terms or higher amounts.</p><h3>Repayment model</h3><p>The guarantor trusts the process via the B2B agreement. If the employee repays normally,</p><p>no action is needed from the guarantor. If the employee defaults:</p><ol><li><p>The guarantor is alerted via the dashboard (countdown to expected resolution).</p></li><li><p>At any point, the guarantor can call payOnBehalf() to cover the debt - tokens are pulled from their wallet at that moment (no pre-locking required).</p></li><li><p>The guarantor's commitment is enforced through the B2B contract off-chain, not by on-chain collateral seizure - keeping the UX lightweight while the legal agreement ensures accountability.</p></li></ol><h1>On-chain mechanics</h1><ul><li><p>registerGuarantee(borrower) - Records the guarantor-borrower relationship. No token transfer, no collateral locked.</p></li><li><p>removeGuarantee(borrower) - Removes the record. Blocked if the borrower has an active or unpaid loan.</p></li><li><p>payOnBehalf(loanId, amount) - Guarantor repays on the borrower's behalf. Tokens pulled from the guarantor's wallet at call time - works exactly like repay() but callable by the registered guarantor.</p></li></ul><h1>Frontend</h1><p>A new Guarantor Dashboard was shipped at /guarantor with:</p><ul><li><p>"My Guarantees" tab - list of wallets the connected address is backing, with bond status, coverage amounts, and alerts for any defaults</p></li><li><p>"Add Guarantee" modal - deposit collateral and register a new borrower</p></li><li><p>"Remove Guarantee" action - safely exit a bond with no active exposure</p></li><li><p>Alert banners highlighting defaulted borrowers and the countdown to bond seizure</p></li></ul><h1>Summary</h1><p>During this hackathon we proved that Unlloo can scale both technically (extension pattern keeping</p><p>contracts deployable as features grow) and commercially (guarantor program enabling real B2B</p><p>credit relationships where companies vouch for their employees on-chain). The model is lightweight:</p><p>no collateral lock-up, no on-chain seizure logic - just a registered commitment backed by a B2B</p><p>agreement, with payOnBehalf() as the on-chain mechanism for the guarantor to honour it.</p><p></p>
<p>Right now, we are in discussions with some angels and are also building long-term relationships with VCs for future partnerships. We currently have one possible angel investor.</p>
