The CreDA protocol uses AI to provide credit ratings using on-chain and traditional financial data
Newyork, November 25, 2021 (GLOBE NEWSWIRE)-CreDA (Credit DeFi Alliance), the world’s first decentralized credit rating service, officially launched its platform following the success of the open beta. Modeled after a traditional consumer credit institution, CreDA is introducing the concept of personal credit scores into the $ 200 billion decentralized finance (DeFi) ecosystem where cryptocurrencies such as Bitcoin, Dogecoin and Ethereum exist. ..
CreDA leverages existing blockchain infrastructure to provide a trust architecture for a relatively young and volatile ecosystem, providing a link between on-chain and traditional financial systems. It aims to simplify user transactions, minimize lender risk, and enable access to capital without the large amount of collateral currently required by DeFi lenders.
According to the Bank of America, more than 200 million users are currently in the world of digital assets, but few financial institutions offer loans. Even within the DeFi space, lenders operate in an over-secured manner with a normal loan-to-value (LTV) ratio of less than 50%. This means that on a DeFi platform with 50% LTV, users will need to deposit at least $ 10,000 to get a $ 5,000 loan. Also, most platforms accept only crypto assets as a form of collateral, creating additional barriers to participation.
“In traditional finance, the total amount of unsecured credit-based loans is several times higher than secured mortgages,” explains Cassie Zhang, Chief Operating Officer of CreDA. “Credit ratings are an integral and missing element within the DeFi space. The introduction of the CreDA credit score enables unprecedented imagination and innovation for both protocol users and developers, but more importantly. In particular, CreDA fulfills its blockchain and decentralized finance promises and provides trust. The architecture needed to free the capital of billions of people without access to traditional banks. “
CreDA allows users to link wallets, create credit NFTs (cNFTs), and borrow low-value or unsecured loans from within the same platform. Users can also use cNFT on partner platforms to take advantage of similar benefits and other incentives for staking and lending. CreDA partners at launch include UniSwap, SushiSwap, Elastos, FilDA, PolyNetwork, O3 Swap, WePiggy, Channels and dForce.
How credit scoring works:
CreDA uses artificial intelligence (AI) to examine user historical transactions in cryptospace across multiple blockchains, using CreDA Oracle to provide credit ratings on the chain. This data is used to calculate the credit score, which is converted into a secure non-fungible token called the credit NFT (cNFT). cNFT allows users to unlock preferential interest rates and incentives in a variety of use cases, including lowering borrowing rates on the DeFi platform.
Built on the Ethereum Layer 2 network, CreDA works with multiple chains including Arbitrum, BSC (Binance Smart Chain), Polkadot, Polygon, HECO (Huobi ECO Chain), and ESC (Elastos Sidechain).
According to the CreDA developers, Credit Oracle already has data on billions of on-chain activities related to over 50 million addresses. This large initial data pool helps you build a reliable and reliable credit model. This model will continue to improve as more data is collected from users who connect and create credit scores.
One of CreDA’s main focal points is to ensure a safe and secure experience for our users. To do this, your data is fully protected and protected by an industry-leading W3C-compliant DID. These DIDs are created as part of the user’s cNFT. For launch, CreDA has also undergone rigorous security audits by the leading blockchain security group, Certik, and will perform similar audits on a regular basis.
The purpose of the CreDA protocol is ultimately to combine traditional (off-chain) and block-chain (on-chain) data to enable flexibility and access between people’s virtual and “real-world” lives. Is to calculate the overall user credit score. This becomes even more relevant as technology advances and society continues to embrace virtual spaces such as the Metaverse.
“As Benjamin Franklin once said,’If you want to know the value of money, borrow it!'” Zhang said: “The outlook for DeFi is evolving rapidly, but There’s one missing element: reliability. The CreDA protocol allows the DeFi platform to model risk profiles across the user base and provide personalized rates and services compared to peers in the industry. Will increase your competitiveness.
“CreDA finally credits the community, a decentralized global network of researchers and engineers building this new digital landscape, and questioning the constraints of the old financial system and taking part in the action. Please give me.”
Through participation in the CreDA Protocol and favorable on-chain activities, users can benefit from preferential margin rates, improved credit ratings, and various incentives based on credit scores.
Fulfill the DeFi promise
In the early days of DeFi and blockchain technology, the vision was to decentralize the industry and improve access to capital for those who do not have access to traditional banks. However, the reality was not that simple, as the lack of confidence in the system meant that lenders had to mitigate the risk by demanding the helpless amount of collateral that has become the standard for DeFi. ..
CreDA fulfills its blockchain and decentralized finance promises, providing the trust architecture needed to free billions of people without access to traditional banks. In addition, CreDA can justify people’s chain behavior and increase access to traditional loans by turning people’s cryptocurrency experiences into creditworthiness.
“Whether you’re a rural farmer in sub-Saharan Africa or a new graduate in Los Angeles, there are still many barriers to access to capital within the traditional financial system,” said World Bank Security. William Chan, the architecture lead, says. Group and advocate data as capital. “While blockchain and DeFi have helped democratize data and finance, there is still a lack of trust that can limit existing unsecured people, but rewarding good behavior on the chain. Providing access to and new users, this system has the potential to unleash new possibilities for nearly 2 billion people worldwide. “
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Company name: CreDA (Credit DeFi Alliance)
Contact: Jamie Read, CMO
Company email: email@example.com