Decentralized Credit Union Protocol


Flaws in the current system for personal credit cards generate a massive social cost, such as expensive handling fees and high interest rates. The revolving interest of credit cards is a cause for poverty among the working and middle classes as credit card debt in developed countries reaches trillions of dollars. Bank institutions supervise personal lines of credit when such finances are in fact our savings. Furthermore, these institutions must collect data on individuals in terms of employment, income, insurance, asset, and shopping records, yet leakage of personal data continues to occur.


Personal credit is established on an individual’s social reputation, which can be extended from the knowledge and trust of friends and colleagues to even broader areas. If social reputation can be calculated into an asset price, then social credit can be generated to provide everyone a line of credit that can be converted to cash whenever needed. This is the concept behind the DCUP — Decentralized Credit Union Protocol.

Social Reputation System

Encompassing corporate and personal credit, social credit systems are common in developed countries. In the United States, the system operates through “credit intermediary institutions” based on the government’s supervisory regulations and management with economic benefits as the orientation. In Europe, public credit investigation institutions are led and established by the government and Central Bank, requiring corporations and people to provide data for the purposes of providing protection under the law.

A sample calculation of Reputation

DCUP Advantage

Transparent and Competitive Interest Rates

DCUP Challenge

  1. The Feasibility of Replacing Lending Relationships with Social Reputation

Use Case Sequence Diagram — Credit Flow

Explanation: Alice has two close friends in her friend list: Bob and Eve. Alice deposits 100 USDT into DCUP for staking, and withdraws an equal amount of 100u Credit Points. Alice gives 50u Credits to Bob and Eve respectively. Now Bob and Eve each have 50u of Virtual Credits.

Use Case Sequence Diagram — My credit limit from social network

Explanation: Alice, Bob, and Eve are close friends. Alice deposits 100 USDT into DCUP for staking, and withdraws an equal amount of 100u Credit Points. Alice gives 50u Credits to Bob and Eve, respectively.

Credit Limit

Since the available credit limit for each person is determined by his or her social circle, the varying sizes of personal social circles lead to different levels of credit limits. To stabilize everyone’s credit limit and prevent it from fluctuating due to changes by credit grantors, the DCUP system adopts two types of measures.

  1. A Fixed Upper Limit


Since everyone’s basic social credit can be established on top of social community frameworks, we believe there is still a large room for the development of Social Finance. Today, small personal trusts can be established at low costs through smart contracts. Based on individuals, small-scale bank services can now achieve what could not be imagined in the past. Indeed, personal credit financing is an application full of great potential.



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