Links
Team Members
| First Name | Last Name | Discord |
|---|---|---|
| Daiana | Bilbao | hello_dayana#4030 |
| Kevin | Le | water1925#7425 |
| Christina | Polyukh | cpolyukh#5660 |
| Alice | He | AliceNoWonderLand#9140 |
Project Description
CircleFi is a DeFi application to help users set up their own rotating savings and credit associations with their friends, family, and coworkers using $ETH cryptocurrency & $DAI stablecoin. Saving Circles can be used for a variety of reasons including to pay for a vacation, a flat tire replacement to other emergency or non-emergency expenses. It’s a popular method of saving because the money is often interest-free and you can get a lot of money relatively quickly. We implemented CircleFi to receive initial fee deposits in $DAI to then invest into AAVE v2 lending pool through the Escrow smart contract. Paying the initial fee deposit is what registers and secures a participant’s spot in a saving circle. Next, we start the rounds where participants are committed to making monthly, weekly, or bi-weekly payments. We accept payments for rounds in $ETH. Our SavingCircle smart contract handles receiving payments, tracking payments, and paying out after each round. We use Chainlink’s VRF to randomly select a participant in the circle to pay out to. The saving circle finishes once every participant has been paid out. Once completed, we distributed the initial deposit fee + interest earned back to everyone! Lastly, we mint dynamic NFT to each participant for successfully participating in a saving circle to build their financial reputation!
Project Context
The informal economy employs about 2 billion women and men and employs 60% of the global workforce. The informal economy exists in all countries, regardless of socioeconomic development level, but statistics show that it is more prevalent in developing countries, with percentages ranging from 67% to 90% (International Labour Office).
Considering the high statistics of individuals working globally in the informal economy, there is an urgent need for financial services to help individuals combat this informality in order to promote financial inclusion and enable wealth building.
With CircleFi, we believe we can empower the 2 billion individuals currently working in the informal economy to save, build wealth and achieve their goals together.
How It Works
To do this, we chose to implement ROSCAs (Rotating savings and credit association). Traditionally, this is an event that is done in person, but as the digital era has progressed, there is a need for people to be able to save without having to come together in person and instead be able to come together online. We can provide rewards, cross-border payments and help an anonymous address establish a trustful reputation with blockchain technology and cryptocurrencies.
What's a ROSCA?
A rotating savings and credit association (ROSCA) is a combo of peer-to-peer lending and peer-to-peer banking where participants agree to meet regularly for a set period of time to save and borrow money together. Why save alone when you can save together?
Example
Let's say a group of 5 people would like to save $10,000 USD each. They can do so by deciding to contribute $2,000 USD each on a monthly basis. Every month, a participant of the group will recieve $10,000 USD. This is done until everyone in the group has recieved $10,000 USD which would be after 5 months. Imagine saving $10,000 USD in as little as a month and completely interest-free!