Confidential Distributed Ledgers for Online Syndicated Lending

Abstract

Online syndicated lending offers quick and convenient financing support to individuals, while diversifying risks by pooling funds from multiple lenders into loan projects. It has experienced explosive growth, reaching a multibillion-dollar market. Establishing transparency is essential for constructing a trusted, fair, and regulation-compliant financial collaboration model. Meanwhile, confidentiality must be maintained to protect the sensitive financial information of individual lenders. Multi-party computation (MPC) can protect the input privacy of lenders, but it cannot safeguard the sensitive information revealed by the fund flow itself. To address these challenges, we propose a new collaborative financial ledger for online syndicated lending. It leverages homomorphic encryption/commitment to enable the reuse of intermediary states without compromising privacy throughout the entire lifecycle of a loan. This system also supports efficient regulation-compliant auditing. We streamline the framework design to optimize performance and develop a prototype system. Even with a large syndicate of 100 lenders, the system still achieves low-latency performance.