Manifesto :: Borrow Against the Future

The cryptoeconomy needs credit expansion.

The modern capitalist financial system is built on two fundamental pillars: a medium of exchange & the creation of credit — specifically, the ability to borrow against creditworthiness and future cash flows rather than existing assets. The global unsecured credit market across consumer and commercial segments is estimated at $5.3 trillion. More specifically, cash flow based financing in the USA represents a $1.3 trillion market through credit lines, revenue-based loans, merchant cash advances, and trade credit. While stablecoins have convincingly delivered on the first pillar over the past decade, DeFi growth remains constricted by the absence of a scalable and capital efficient mechanism for credit creation. DeFi lending is still currently split into two extremes: (1) overcollateralized loans backed by a limited set of DeFi assets, or (2) uncollateralized loans to offchain private credit firms , institutional market makers, and reputation-based social circles. And despite traditional banks and banking-as-a-service fintech lenders having lower costs of capital under a fractional reserve system, they remain unable, unwilling, or restricted from underwriting cryptonative assets and cash flows due to regulatory and risk constraints.

Crypto financial markets need a scalable and permissionless credit primitive that can extend uncollateralized loans to cryptonative entities (ie. farmers, traders, businesses, and/or AI agents), underwritten against the entire universe of DeFi assets, offchain assets, and future assets (ie. cash flows). This not only unlocks significant capital efficiency and borrowing power for existing asset-rich entities, but more importantly it lays the foundation for enabling high productivity asset-light entities to borrow against their cash flows, creating a self-sustaining cycle of economic expansion native to the Ethereum network. To truly become the internet-native financial system — free from bank liquidity — a cryptonative credit primitive must emerge to enable economic expansion backed by future growth.