P2P Lending DApp with Reputation, Automation & Collateral

A fully decentralized lending platform built on Ethereum. Users can borrow stablecoins (DUSD) by locking ETH as collateral. The system features a Soulbound Reputation System that dynamically optimizes capital efficiency for trusted borrowers. It integrates real-world price feeds via a custom Oracle Bridge, uses IPFS for immutable metadata storage, and employs Automated Keeper Bots to ensure protocol solvency.

Architecture

• Backend: Hardhat, Solidity, OpenZeppelin
• Frontend: Next.js, TypeScript, Tailwind CSS, Shadcn UI
• Integration: Wagmi, Viem
• Key Features:
  • ERC-20 Stablecoin Implementation
  • Chainlink Oracle Integration (Mocked for Demo)
  • Cryptographic hashing of loan agreements
  • Dynamic Collateral Ratios based on History
  • IPFS with Pinata
  • Loans given for a duration

Getting Started

Prerequisites

• Node.js (v18 or higher)
• MetaMask Wallet (Browser Extension)
• Git
• Pinata

1. Setup (Installation)

Clone the repository and install dependencies for both the backend and frontend.

# Using the helper script
./setup.sh

# OR Manual Installation
cd backend && npm install
cd ../frontend && npm install

2. Environment Configuration (IPFS)

This project uses Pinata for decentralized IPFS storage. You must configure your API keys to upload loan metadata.

1. cd frontend
2. cp .env.example .env.local
3. Get your API Keys from Pinata Dashboard and fill the file:

   NEXT_PUBLIC_PINATA_API_KEY=your_api_key
   NEXT_PUBLIC_PINATA_SECRET_API_KEY=your_secret_key
   NEXT_PUBLIC_PINATA_GATEWAY=gateway.pinata.cloud

3. Run the Project

Running a full-stack DApp requires two separate terminal windows running simultaneously.

Terminal 1: The Blockchain

Start the local Hardhat network. This acts as your local Ethereum blockchain server.

cd backend
npx hardhat node

Keep this terminal open. It will show transaction logs and gas usage.

Terminal 2: Deployment & Application

Deploy the smart contracts and launch the user interface.

# Using the helper script (Assumes Terminal 1 is running)
./run.sh

# OR Manual Execution
# 1. Deploy contracts (Auto-updates frontend config)
cd backend
npx hardhat run scripts/deploy.ts --network localhost

# 2. Start Frontend
cd ../frontend
npm run dev

Terminal 3: Start Liquidity Bots

cd backend
npx hardhat run scripts/bot.ts --network localhost

Open http://localhost:3000 in your browser.

---

How to Demo

Step 1: Configure MetaMask

1. Open MetaMask settings.
2. Add a Network Manually:
   • RPC URL: http://127.0.0.1:8545
   • Chain ID: 31337
   • Currency Symbol: ETH
3. Import Accounts:
   • In Terminal 1, Hardhat prints 20 accounts with private keys.
   • Import Account #0 (The Deployer/Borrower).
   • Import Account #1 (The Lender).

Step 2: Borrowing (User A)

1. Connect Account #0.
2. Navigate to the Borrow tab.
3. Request 100 DUSD.
4. Confirm the transaction. You will see your ETH balance decrease (Collateral locked).

Step 3: Lending (User B)

1. Switch to Account #1.
2. Navigate to the Lend tab.
3. Click "Get 1000 Test DUSD" (Wait for balance update).
4. Approve and Fund the loan request.

Step 4: Liquidation (Admin Demo)

To demonstrate the safety features of the smart contract:

1. Scroll down to the Admin / Demo Controls.
2. Manually change the Mock ETH Price from 2000 to 100.
3. Click Update Oracle.
4. Click Liquidate on the active loan.
5. Explain: The contract detected under-collateralization and allowed the liquidation to secure the platform's solvency.

---

Directory Structure

my-lending-dapp/
├── backend/
│   ├── contracts/       # Solidity Smart Contracts
│   ├── scripts/         # Deployment & Config Gen Scripts
│   └── hardhat.config.ts
├── frontend/
│   ├── src/app/         # Next.js Pages
│   ├── src/components/  # UI Components
│   └── src/lib/         # Constants.ts (Auto-generated)
├── setup.sh             # Installation Helper
└── run.sh               # Execution Helper