Credit DeFi Alliance (CreDA) – the world’s first decentralised credit rating service – has launched its platform following a successful open beta.
By following the example of traditional consumer credit agencies, CreDA introduced its concept of personal credit scores into the $200bn decentralised finance (DeFi) ecosystem populated by cryptocurrencies such as Bitcoin and Ethereum.
Leveraging existing blockchain infrastructure, the company said it provides a trust architecture for the crypto ecosystem and a link between on-chain and traditional financial systems.
The Alliance said its focus was on simplifying transactions for users, minimising risk for lenders and enabling access to capital without the need for high amounts of collateral usually needed by DeFi lenders.
Cassie Zhang, CreDA’s Chief Operating Officer explained that, in traditional finance, the total value of credit-based, unsecured loans was several times that of collateralised mortgage loans.
“The introduction of CreDA credit scores will enable unprecedented imagination and innovation to protocol users and developers alike,” she noted.
“But more importantly, CreDA fulfills the promise of blockchain and decentralised finance, providing the trust architecture needed to unlock capital for the billions of people without access to traditional banking.”
CreDA would, therefore, allow users to link their wallets, mint a credit NFT (cNFT) and borrow low or non-collateralised loans all from within the same platform.
Fulfilling the promise of DeFi
The company asserted it wants to improve access to capital for people who don’t have access to traditional banking since the DeFi reality hasn’t been so straightforward.
The lack of trust in the system means that lenders must de-risk by demanding crippling amounts of collateral, which has become the standard in DeFi.
CreDA stressed it would fulfil the promise of blockchain and decentralised finance, providing the trust architecture needed to unlock capital for the billions of people without access to traditional banking.
At launch, CreDA’s partners included UniSwap, SushiSwap, Elastos, FilDA, PolyNetwork, O3 Swap, WePiggy, Channels, and dForce.
Built on the Ethereum Layer 2 network, CreDA will operate across multiple chains including Arbitrum, BSC (Binance Smart Chain), Polkadot, Polygon, HECO (Huobi ECO Chain) and ESC (Elastos Sidechain).