Introducing DeCredit — Bringing Credit Ratings to the Blockchain
Decentralized lending is a potent tool, showing the effect that DeFi and blockchain technology can have on the lives of people all over the world by empowering them to have more control over their finances. So far, billions of dollars in loans ranging in all different sizes have been originated and paid back using smart contracts, allowing for superior loan rates and for regular users to earn interest previously relegated to the financial sector.
So far, most of the popular loaning platforms have used over-collateralization as a means of securing a loan, putting up additional capital in order to take out a smaller loan than the original deposit. This is one of the only ways to provide security to the loaner in a decentralized manner, as if the borrower does not pay back his principal plus interest, then the lender can claim the original collateralized deposit. However, DeCredit is changing this industry, combining the old with the new by introducing a decentralized credit-based lending model, allowing users to secure loans without deposit capital as collateral.
A Safe, Fair, and Decentralized System
Using the DeCredit platform, users will be able to obtain off-chain credit ratings usable to secure loans. DeCredit uses credit authentication nodes and decentralized oracles to provide different lending limits and interest rates to customers, using a combination of on-chain and off-chain credit assessments. For many, this will make securing a loan even more accessible, as you do not have to lose control over your assets to obtain the loan, drastically expanding the potentials of the decentralized lending market. Through the novel use of the DeCredit scoring System (DSC), a predetermined algorithm will be able to assess the potential credit risk of a user, calculating an accurate credit score that reflects the creditworthiness of any particular user worldwide.
Bringing Credit-Based Lending Global
For the millions of people out there that have tried to secure a loan through traditional means, they understand firsthand how tedious and exaggerated the process can be, making it potentially challenging to secure a loan depending on their circumstances. However, even though there are many challenges, these people are the lucky ones, as billions around the world have no access to any sort of banking or loaning infrastructure, leaving them out of the modern financial world and having to fend for themselves when it comes to finances.
DeCredit has the potential to instantly change this, empowering a new class of global users. Through this innovative platform, users will not even need to have a bank anywhere close to them to secure a loan, as it will be able to be generated solely through the use of an internet connection and a device that can interact online. DeCredit has the potential to fundamentally change the lives of many; whether it comes to business loans, microloans, personal loans, or any other category, access to borrowed capital just got infinitely easier for the greater global population.
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