zLend: A Dual-Scope Cash-Flow Reconstruction Framework for On-Chain Credit Underwriting
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Abstract (arXiv)
Decentralized lending lacks a credit bureau: a borrower's capacity to repay must be inferred entirely from public on-chain activity, without income verification or a liability record. This paper presents zLend, a deployed cash-flow underwriting framework that reconstructs a wallet's daily balance history from raw token transfers and derives short-duration repayment-capacity signals from it. The reconstruction is performed twice per wallet, once restricted to a fixed stablecoin basket and once over all fungible transfers, on the premise that a wallet's total token holdings and its liquid, spendable balance are distinct quantities whose conflation misprices risk. From each series we derive liquidity coverage against a fixed loan size, cash-flow volatility and regularity, a drawdown-and-recovery statistic adapted from quantitative finance, and a recurring-counterparty detector that identifies salary-like payment cadence from transfer timing alone. The two views are then compared: a wallet with large aggregate holdings whose stablecoin reserve rarely covers the loan size is flagged as a liquidity mismatch irrespective of total wealth. We specify the pipeline formally, document the golden-master methodology used to verify a cross-language production migration to numerical tolerance 1e-9, and characterize the tier function's parameter sensitivity with an independent reimplementation validated to exact agreement (78 of 78 field assertions) against the deployed system's reference fixtures. Tier assignment is governed predominantly by the reference loan size, with four of six reference wallets changing tier across loan sizes from USD 10 to USD 25,000; the drawdown and coverage criteria bind on disjoint wallets, so neither subsumes the other; and no criterion in the tier rule is inert. zLend is deployed in production, informing real lending decisions via third-party API integrations.
Key facts. Cited by 1 paper in the map (data through 14 Oct 2026). Builds on 4 of its 12 references that are in the map. First posted on arXiv 17 Aug 2026.
Builds on
4 of 12 references.
References · 4
- 2021An Empirical Study of DeFi Liquidations: Incentives, Risks, and Instabilitiescited by 8
- 2017Behavior Revealed in Mobile Phone Usage Predicts Loan Repaymentcited by 4
- 2025zScore: A Universal Decentralised Reputation System for the Blockchain Economycited by 4
- 2025Deep Reputation Scoring in DeFi: zScore-Based Wallet Ranking from Liquidity and Trading Signalscited by 3
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Citing papers per year: 2026: 1.
1 paper.