Risk & Reputation
RevvFi differentiates itself by using a dynamic, on-chain reputation system that directly impacts borrowing costs and limits.
Reputation Score (RS)
Every borrower is assigned a Reputation Score between 0 and 1000.
Score Calculations
- Starting Score: 500
- Successful Full Repayment: +1 point
- Early Repayment Bonus: +2 points
- Liquidation (Default) Penalty: -50 points
- Late Payment Penalty: -5 points per day late
Risk Tiers
Based on the RS, borrowers are categorized into Risk Tiers. These tiers are visible to all lenders in the OfferBook.
| Score Range | Label | Description |
|---|---|---|
| 900 - 1000 | AAA | Prime borrower, lowest risk. |
| 800 - 899 | AA | Highly reliable. |
| 700 - 799 | A | Reliable with minor history. |
| 500 - 699 | B | Standard/New borrower. |
| 300 - 499 | C | High risk, past defaults. |
| 0 - 299 | D | Critical risk, multiple defaults. |
Technical Impact of Reputation
Reputation is not just a cosmetic badge; it is enforced by the smart contracts:
- APR Flooring: Lenders can set filters to only match with borrowers above a certain RS. High RS borrowers naturally attract lower APR offers.
- Loan-to-Value (LTV) Boost: AAA borrowers may be granted up to 90% LTV on specific volatile assets, while D-tier borrowers might be capped at 40%.
- Liquidation Thresholds: Higher reputation can lead to slightly more “grace” in liquidation thresholds, reducing the risk of liquidation during minor flash crashes.
Reputation Recovery
If a borrower defaults and their score drops, the only way to recover is through a series of successful, smaller “reputation-building” loans. This creates an on-chain credit history that lenders can trust without requiring real-world identity.