Resources

Key Features

Privacy-Preserving Verification

zkTLS (Zero-Knowledge TLS)

Locale uses zkTLS via Reclaim Protocol to verify bank data without exposing sensitive information:

graph LR
    A[Bank API] -->|TLS| B[Plaid]
    B -->|Encrypted| C[Locale Backend]
    C -->|Commitment| D[Blockchain]
    C -->|ZK Proof| E[Verifier Contract]
    E -->|Valid/Invalid| D

Benefits:

• Bank data never stored in plaintext

• Proofs verify authenticity without revealing values

• Borrower privacy maintained throughout

Soulbound Credentials

Non-transferable NFTs that prove verification status:

Credential	Purpose	Transferable
BorrowerCredential	Proves KYC completion	No
InvestorCredential	Proves accreditation level	No

These credentials:

• Cannot be sold or transferred

• Include expiration dates

• Can be revoked for fraud

• Store KYC level (Basic/Enhanced)

Dynamic Risk Assessment

DSCR-Based Interest Rates

Interest rates automatically adjust based on borrower financial health:

Interest Rate = Base Rate + Risk Premium

DSCR Range	Risk Premium	Example Total Rate
≥ 1.50	0%	5%
1.25 - 1.49	2%	7%
1.00 - 1.24	5%	10%
< 1.00	10%	15%

Continuous Monitoring

Unlike traditional loans with static rates:

1. Daily Transaction Sync - Plaid fetches new transactions

2. Weekly DSCR Recalculation - Cartesi processes updated data

3. Rate Adjustments - Rates can change based on financial health

4. Admin Oversight - Large changes require approval

Off-Chain Computation

Cartesi Rollups

Complex calculations happen off-chain for efficiency:

graph TB
    subgraph "On-Chain (Arbitrum)"
        InputBox[InputBox Contract]
        LoanPool[SimpleLoanPool]
    end

    subgraph "Off-Chain (Cartesi)"
        DApp[Cartesi DApp]
        DB[(SQLite DB)]
        DSCR[DSCR Calculator]
    end

    InputBox -->|Input| DApp
    DApp --> DB
    DApp --> DSCR
    DSCR -->|Notice| LoanPool

Why Cartesi?

• Complex financial calculations without gas costs

• Verifiable computation with fraud proofs

• Full Linux environment for sophisticated logic

Institutional-Grade Pools

Pool Types

Type	Target Borrowers	Typical APY	Risk Level
Small Business	SMBs, startups	8-12%	Medium
Real Estate	Property owners	6-9%	Lower
Consumer	Individuals	10-15%	Higher
Mixed	Diversified	7-11%	Balanced

Pool Configuration

Managers can customize:

• Minimum Stake - Entry threshold for investors

• Pool Size - Maximum capital accepted

• Management Fee - Ongoing fee (e.g., 2%)

• Performance Fee - Fee on returns (e.g., 20%)

• Allowed Industries - Borrower restrictions

• Credit Score Minimum - Eligibility threshold

Transparent Fee Structure

For Investors

Fee Type	Rate	When Applied
Management Fee	0-2%	Annual, on TVL
Performance Fee	0-20%	On realized returns
Staking Fee	0.1%	On stake amount

For Borrowers

Fee Type	Rate	When Applied
Origination Fee	0-2%	At loan creation
Interest Rate	5-15%	Ongoing, based on DSCR
Late Payment Fee	2%	On overdue amount

Wallet Integration

Alchemy Account Kit

Locale uses Alchemy's Account Abstraction for seamless UX:

Supported Authentication:

• Email (magic link)

• Social (Google, Apple)

• Passkey (biometric)

• External wallet (MetaMask, etc.)

Features:

• Gasless transactions (sponsored by Locale)

• Session keys for convenience

• Multi-device support

• Recovery options

Supported Networks

Network	Status	Use Case
Arbitrum One	Production	Main deployment
Arbitrum Sepolia	Testnet	Development
Base	Planned	Future expansion

Security Features

Smart Contract Security

• UUPS Upgradeable - Can fix bugs without migration

• Role-Based Access - Granular permissions

• Pausable - Emergency stop capability

• Reentrancy Guards - Prevent attack vectors

Operational Security

• Multi-Sig Admin - Critical actions require multiple approvals

• Rate Limits - API throttling prevents abuse

• Webhook Verification - Plaid callbacks authenticated

• Encrypted Storage - Sensitive data protected at rest

Compliance Features

KYC Integration

Via Plaid Identity Verification:

• Government ID verification

• Selfie matching

• Address verification

• Sanctions screening

Audit Trail

All actions logged:

• Loan applications and approvals

• Stake/unstake transactions

• Rate changes with reasons

• Admin actions

API & Integration

REST API

Full API for building on Locale:

# Example: Get public pools
curl https://app.locale.cash/api/pools/public

Webhooks

Real-time notifications for:

• Stake events

• Loan status changes

• Rate adjustments

• KYC completions

Smart Contract Events

Listen to on-chain events:

event Staked(address indexed user, bytes32 indexed poolId, uint256 amount);
event LoanCreated(bytes32 indexed loanId, address indexed borrower, uint256 amount);
event RepaymentMade(bytes32 indexed loanId, uint256 amount);

Coming Soon

• Multi-Chain Deployment - Expand to Base, Optimism

• Governance Token - Community voting on protocol changes

• Secondary Market - Trade pool shares

• Institutional Features - Bulk operations, reporting