RociFi launches on zk-Sync Testnet!
Apr 22
Today we are excited to announce that RociFi has been deployed on zk-Sync’s Goerli Testnet.
As one of our community members said “By integrating with zkSync, blog.roci.fi will be able to offer its users fast and low-cost transactions, as well as enhanced security and scalability.”
However, there’s even more to it! Here is a full thesis on why launching on zk-Sync matters for scaling of under-collateralized and highly-capital-efficient loans in DeFi.
Due to its over-collateralized nature, DeFi Lending industry can’t become mass market and will never reach the size of the traditional lending industry; a multi-trillion dollar market.
The main hurdle to this is that DeFi users are anonymous and unsecured loans bring capital risks to lenders. At the same time, DeFi users are privacy-obsessed and are very sensitive to leaving any personal information connected to their address.
To date, RociFi protocol has facilitated on Polygon about 2000 under-collateralized loans, however, a few key components were still missing to make under-collateralized lending less risky for depositors, which hampered its growth.
There are a few components embedded in Zk-sync Era that are the missing pieces of the puzzle to enable under-collateralized lending in DeFi at scale
- Automatic payments
When unsecured loans on RociFi were none-repaid, the main reason for that was that users forgot to repay when loans were due. Setting up notifications is tricky since borrowers do not want to share their contact details.
On Zk-sync, RociFi users will be able to create automatic and scheduled transfers, recurring payment subscriptions, and other applications that are impossible today on other chains — all while retaining self custody.
- Batching complex actions together
On EVM-chains users have to manually approve each contract approval and transaction, creating unnecessary friction and adding fees. On RociFi borrow action requires two approvals: for collateral transfer and for the loan issuance. This hurts user experience and conversion.
With Account Abstraction on zk-sync, these operations on RociFi will be batched for users and signed all at once; enabling a cheaper and faster user experience.
- Account abstraction and Argent integration
Despite several precautions and gates embedded in RociFi’s credit scoring engine, some sophisticated borrowers are nevertheless able to trick and take several unsecured loans when they orchestrate sybil borrowing.
Zk-Sync Era’s default integration with Argent wallet will ensure sybil-protection by enabling unsecured loan limits to borrowers identified by unique combination of verified phone number and email.
Go ahead and play with RociFi application
Zk-Sync Goerli app is a simplified version of RociFi’s app on Polygon. It allows anyone to take fixed-term fixed-rate liquidation-free USDC and USDT loans with 84% of collateral. Scoring-based collateral levels will be added at the later stage.
Next step: zk-Sync Era Mainnet!
RociFi — Capital-Efficient Lending Protocol on Polygon