❓FAQ
For Borrowers
How much can I borrow?
LendFriend doesn't set hard limits on loan amounts. Instead, the market decides through risk grades. Your borrowing capacity depends on:
Your social network strength
Your repayment history (if any)
How much you're requesting relative to your network
First-time borrowers typically start with $50-200 loans. As you build repayment history, larger amounts become viable.
→ Learn more about risk scoring
What if I can't repay on time?
Defaulting damages your reputation with friends who lent to you and makes future borrowing difficult.
Before default:
Communicate with your lenders early
Your social connections see non-payment
Future loans will be much harder to secure
After default:
Your on-chain history shows the default
Close friends may feel personally let down
You'll need to rebuild trust before borrowing again
How long do loans last?
All loans currently have 90-day terms (3 months) with lump sum repayment at maturity.
As the platform matures, we'll introduce longer terms (6 months, 12 months) for qualified borrowers with proven repayment history.
→ Learn more about risk scoring
Do I need to make monthly payments?
No. LendFriend loans use lump sum repayment—you pay back the full amount at the end of the 90-day term.
Research shows less frequent repayments don't increase default rates while reducing stress and transaction costs for borrowers.
Can I tip my lenders when I repay?
Yes! You can repay more than the principal amount, and the extra automatically distributes proportionally among all lenders as a tip.
Example:
You borrowed $100 total ($30 from Alice, $70 from Bob)
You repay $110 ($10 tip)
Alice receives $33 ($3 tip), Bob receives $77 ($7 tip)
Tips show gratitude, strengthen your reputation, and signal financial health. Even small tips (5-10%) make a significant impression on future loan applications.
Impact on Reputation: Borrowers who tip build stronger social connections and typically see faster funding on subsequent loans.
How do I get a better risk grade?
Your risk grade improves through:
Building social connections on Farcaster
Starting with smaller loans ($50-200) first
Repaying on time to build on-chain history
Having friends contribute early to your loans
Pro Tip: Ask close friends to contribute first. Their participation signals trust to other potential lenders.
→ Learn more about risk grades
Is there interest on loans?
Currently, LendFriend loans are zero-interest. This bootstraps the network and allows social trust mechanisms to mature.
As the platform develops, we'll introduce market-rate interest through a community-governed evolution process.
→ Learn more about our roadmap
For Lenders
How do I know if I should fund a loan?
Check two key metrics:
Your personal trust score with the borrower (0-100)
60+ (🟢 LOW RISK): Close social ties, fund confidently
30-59 (🟡 MEDIUM RISK): Some connections, proceed with caution
<30 (🔴 HIGH RISK): Minimal connection, only fund if you can afford to lose it
Loan support strength (percentage of lenders who know borrower)
60%+ (🟢 STRONG): Most lenders know borrower
30-59% (🟡 MODERATE): Some network validation
<30% (🟠 WEAK): Few connections, high risk
What happens if a borrower defaults?
LendFriend loans are uncollateralized. If a borrower doesn't repay, you cannot recover funds through legal means.
Your recourse:
Social pressure through shared network
Borrower's on-chain reputation is permanently damaged
Future lending to that borrower becomes extremely difficult
Minimize risk by:
Funding borrowers with high trust scores (60+)
Diversifying across multiple loans ($10 to 10 loans > $100 to 1 loan)
Contributing early if you're close friends (signals confidence to others)
Can I earn interest on my loans?
Not currently. LendFriend starts with zero-interest loans to bootstrap social trust mechanisms.
This will evolve through community governance as the platform matures and collects repayment data.
→ Learn more about our evolution strategy
Can borrowers tip me when they repay?
Yes. Borrowers can repay more than the principal amount, and any overpayment automatically distributes proportionally among all lenders.
How it works:
Borrower repays 110% instead of 100%
Your share: (your contribution / total principal) × total repayment
If you funded 30% of the loan, you receive 30% of the 110%
Tips are voluntary and signal:
Borrower's financial health
Gratitude for your support
Strong social accountability
While loans are zero-interest, tips provide a way for borrowers to express appreciation and build reputation.
How do trust scores work?
Trust scores measure social proximity using the Adamic-Adar Index:
Counts mutual connections between you and borrower
Weights connections by how "selective" they are
Close friend with 20 connections counts 3× more than influencer with 10,000
Filters out bots/spam accounts
Scores range from 0-100:
60+: Close social ties
30-59: Friends-of-friends
<30: Strangers or distant connections
→ Learn more about the algorithm
Should I fund strangers with low trust scores?
Generally no, unless the loan has STRONG support (60%+ of other lenders know the borrower).
Why low-trust lending is risky:
Minimal social accountability
No personal relationship for repayment pressure
Higher historical default rates
When it might work:
Loan has strong network validation from others
You're diversifying small amounts across many loans
You're comfortable with potential loss
Best Practice: Focus lending on borrowers you have medium-to-high trust scores with, or loans with strong support from connected lenders.
How can I see a borrower's repayment history?
Repayment history is stored on-chain and visible in the borrower's profile.
For new borrowers with no history, rely on:
Trust scores (social proximity)
Support strength (how many connected lenders are funding)
Risk grades (algorithmic assessment combining factors)
→ Learn more about risk scoring
Technical Questions
What blockchain is LendFriend on?
LendFriend operates on Base L2 (Ethereum Layer 2), offering:
Low transaction costs (~$0.01)
Fast confirmation times
Ethereum-level security
Easy integration with Farcaster
→ Learn more about our technical stack
How are trust scores calculated?
Trust scores are calculated off-chain using Farcaster social graph data via Neynar API:
Fetch mutual connections between lender and borrower
Apply Adamic-Adar weighting (inversely proportional to network size)
Filter by quality scores (removes bots/spam)
Add bonuses for direct follows and network overlap
Cache results for 30 minutes
Results guide UI displays but don't affect smart contract execution.
Is my social graph data stored on-chain?
No. Social graph data stays off-chain. Only loan transactions are recorded on-chain:
Loan creation
Contributions
Repayments/defaults
This keeps gas costs low (~$0.01 per transaction) while maintaining privacy.
Can I integrate LendFriend into my app?
Yes! LendFriend is open source. You can:
Read smart contracts directly
Use our APIs for trust score calculations
Build alternative interfaces
Check our GitHub for documentation and integration guides.
Getting Started
I'm new—where should I start?
As a borrower:
Read Borrower Profiles
Start with a small loan ($50-200)
Share with close friends first
Repay on time to build history
As a lender:
Understand Trust Scores
Start with small amounts to friends
Diversify across multiple loans
Check support strength before funding strangers
To understand the system:
Read Overview
Explore Social Trust Scoring
Review Academic Research
Still have questions? Join the conversation on Farcaster or contribute to our documentation.
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