JUBILEE: Secure Debt Relief and Forgiveness

TL;DR

JUBILEE introduces a secure, incentive-compatible mechanism for debt relief that leverages secure computation techniques, enabling more efficient and truthful debt settlements without trusted third parties, with practical blockchain implementations.

Contribution

It presents the first secure computation-based mechanism for debt relief that is incentive-compatible, strategy-proof, and ex-post efficient, improving over previous methods.

Findings

Higher expected profits in debt settlements using secure computation

Increased probability of successful debt forgiveness

Practical implementations on spreadsheets and blockchain smart contracts

Abstract

JUBILEE is a securely computed mechanism for debt relief and forgiveness in a frictionless manner without involving trusted third parties, leading to more harmonious debt settlements by incentivising the parties to truthfully reveal their private information. JUBILEE improves over all previous methods: - individually rational, incentive-compatible, truthful/strategy-proof, ex-post efficient, optimal mechanism for debt relief and forgiveness with private information - by the novel introduction of secure computation techniques to debt relief, the "blessing of the debtor" is hereby granted for the first time: debt settlements with higher expected profits and a higher probability of success than without using secure computation A simple and practical implementation is included for "The Secure Spreadsheet". Another implementation is realised using Raziel smart contracts on a blockchain with Pravuil consensus.