### Problem

Bitcoin DeFi has no credit markets. Today, users must overcollateralize loans, locking up capital and excluding millions. This restricts liquidity and prevents Bitcoin from functioning as productive capital.

### Solution

We’re building the first undercollateralized borrowing and lending protocol for Bitcoin on Starknet. Both sides of the market borrowers and lenders can opt in to KYC-enabled credit profiles.

Borrowers unlock liquidity from their BTC without selling, accessing credit based on verified identity and creditworthiness instead of raw collateral.

Lenders can also choose to KYC, enabling them to lend into higher-trust markets with reduced risk exposure, or remain anonymous and lend into collateralized pools.

This creates a spectrum: from fully KYC’ed undercollateralized loans to permissionless collateralized loans, all within the same protocol.

### How It Works

Identity Layer – Borrowers and/or lenders can verify identity and creditworthiness using integrations like Reclaim.

Market Matching – Smart contracts route participants into the right pools.

KYC borrower <> KYC lender (undercollateralized, trust-enabled credit).

KYC borrower <> non-KYC lender (risk-priced pools).

Non-KYC borrower <> lender (traditional overcollateralized lending).

Risk Engine – Transparent credit scoring + smart contracts determine collateral requirements, interest rates, and liquidation mechanics.

Execution – Loans and repayments settle on Starknet.

### Data Flow Architecture

#### Borrowing Flow

User → Identity Verification → Credit Assessment → Pool Routing →
Collateral Lock → Loan Origination → BTC Disbursement

#### Lending Flow

User → (Optional KYC) → Pool Selection → Liquidity Deposit →
Interest Accrual → Yield Distribution

#### Liquidation Flow

Health Monitor → Threshold Breach → Liquidation Trigger →
Collateral Auction → Debt Recovery → Lender Protection