Locale Lending
Locale Lending is currently in development. The platform will launch on mainnet in 2026. Join our Discord for updates.
Locale Lending is an on-chain lending platform connecting borrowers who need capital with investors seeking yield. Through transparent lending pools and privacy-preserving verification, we assess creditworthiness without exposing sensitive data—all secured by smart contracts and verifiable compute.
How It Works
- Apply for loans
- Submit RWA collateral
- Verify income (Plaid)
- DSCR calculation
- ZK verification
- Smart contracts
- Provide liquidity
- Earn yield
- Risk tranching
Key Features
For Investors
| Feature | Description |
|---|---|
| Stable Yields | Earn consistent returns on USDC deposits |
| Geographic Focus | Support your local community |
| Transparent Risk | On-chain visibility into pool health |
| Instant Liquidity | Withdraw anytime (subject to utilization) |
For Borrowers
| Feature | Description |
|---|---|
| Privacy-Preserving | Income verified without exposing raw data |
| Fair Assessment | DSCR-based underwriting, not credit scores |
| Fast Funding | Automated approval and disbursement |
| Competitive Rates | No middlemen means better rates |
For Everyone
| Feature | Description |
|---|---|
| Decentralized | No central authority controls funds |
| Verifiable | All calculations provably correct |
| Auditable | Open-source contracts, public audits |
| Community-Owned | Governance by stakeholders |
The DSCR Model
Locale Lending uses Debt Service Coverage Ratio (DSCR) instead of traditional credit scores:
DSCR = Net Operating Income / Total Debt Service
How DSCR Works
- Income Verification: zkFetch retrieves transaction history from Plaid
- Income Calculation: Cartesi VM computes average monthly income
- Debt Assessment: Total monthly debt obligations calculated
- DSCR Computation: Ratio determines loan eligibility
DSCR Thresholds
| DSCR | Interpretation | Eligibility |
|---|---|---|
| < 1.0 | Income doesn't cover debt | Not eligible |
| 1.0 - 1.25 | Marginal coverage | Limited eligibility |
| 1.25 - 1.5 | Good coverage | Standard terms |
| > 1.5 | Strong coverage | Preferred terms |
Example Calculation
| Component | Value |
|---|---|
| Monthly Income | $5,000 (from Plaid) |
| Existing Debt | $1,500/month |
| Proposed Loan Payment | $800/month |
| Total Debt Service | $2,300/month |
| DSCR | 5,000 ÷ 2,300 = 2.17 |
Result: DSCR of 2.17 qualifies for preferred terms.
Technology Stack
Data Attestation (zkFetch)
zkFetch provides zero-knowledge proofs of HTTPS requests:
Plaid API → zkTLS Attestation → Encrypted Data
- Proves data came from Plaid without revealing contents
- Runs on self-hosted EigenCloud TEE infrastructure
- No third-party attestor trust required
Off-Chain Compute (Cartesi)
Cartesi provides Linux-based verifiable compute:
| Step | Description |
|---|---|
| Filter Income | Extract positive transactions |
| Remove Outliers | Use MAD algorithm (threshold: 3) |
| Calculate Average | Monthly income over period |
| Compute DSCR | Ratio of income to debt service |
| Return Result | DSCR + confidence score |
Validation (EigenCloud TEE)
EigenCloud validates Cartesi outputs in a Trusted Execution Environment:
- TEE hardware ensures computation integrity
- Remote attestation verifies execution environment
- Cryptographic proofs of correct execution
Pool Structure
Pool Parameters
Each lending pool has configurable parameters:
| Parameter | Description |
|---|---|
| Asset | Pool denomination (typically USDC) |
| Min DSCR | Minimum DSCR for eligibility |
| Max LTV | Maximum loan-to-value ratio |
| Base Rate | Base interest rate |
| Optimal Utilization | Target utilization rate |
| Max Utilization | Hard cap on utilization |
| Operators | Approved validators |
Interest Rate Model
Rates adjust based on pool utilization:
If utilization < optimalUtilization:
rate = baseRate + (utilization / optimalUtilization) * slope1
If utilization >= optimalUtilization:
rate = baseRate + slope1 + ((utilization - optimalUtilization) / (1 - optimalUtilization)) * slope2
This incentivizes balanced supply and demand.
Getting Started
For Investors
For Borrowers
For Pool Operators
Security
Smart Contract Security
- Audited: Multiple third-party audits
- Immutable Core: Critical logic cannot be changed
- Timelock: Governance changes have delay period
- Emergency Pause: Circuit breaker for critical issues
Compute Security
- TEE Isolation: Sensitive data processed in hardware enclaves
- zkTLS: Cryptographic proof of data authenticity
- Multi-party Validation: No single point of trust
Economic Security
- Collateralization: Loans backed by verifiable income
- TEE Verification: EigenCloud attestation ensures computation integrity
- Insurance Fund: Reserve for unexpected losses
Locale Lending is in development. Public testnet access will be announced in 2026. Join our Discord for launch updates.