---
# System prepended metadata

title: 'Real World Zeros: Proof of Financing'

---

#    Proof of Financing in an M&A deal

We simulate how zero knowledge technology may be applied to a real world situation, where trust problems are suboptimally mitigated today, using reputation games or third parties.

We focus on the mergers and acquisitions (M&A) industry for concreteness, but the solution can be applied to other settings with similar trust dynamics.

## Set Up

In the later stage of an M&A deal, Buyers need to prove to the Seller that they have acquired the necessary financing to complete a deal.

This usually involves naming the banks that have committed to provide the financing. However, by naming these banks, Buyers provide valuable information about which lenders are willing to finance this deal. 

If the Seller prefers another buyer but that buyer is facing difficulty finding their own financing, the Seller could share the names of these banks with their preferred buyer, thus disadvantaging the Buyer that first secured the financing.

##    Goal

Buyer can provide assurance to the Seller that lending banks within a known network of reputable banks have provided their lending commitments for a deal proposed by a specific Buyer, for the amount of loan financing disclosed in the bid letter.

This assurance is provided without revealing neither the identities of these lending banks nor the maximum amount committed.

## Use Case Diagram

The buyer representing to the seller that financing was obtained, without disclosing from which banks.

![use case diagram.drawio](https://hackmd.io/_uploads/rkKq_nK-1g.png)


## Sequence Diagram
From each player's perspective. Refer to [Github repo](https://github.com/oskarth/rwz-pof/) for a more technical version of this diagram.

![2024-11-06 - Device A sequence diagram](https://hackmd.io/_uploads/B1YmrbtWye.png)
