On-chain credit is the crux of #Web3 debt financing.

On-chain credit is the crux of #Web3 debt financing.

Solv is building the first on-chain credit system that allows DAOs to accelerate growth through under-collateralized loans or offer investors a sustainable investment – starting with
u/EthSign
.

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5 thoughts on “On-chain credit is the crux of #Web3 debt financing.”

  1. I want to get in day one on this stuff if there’s no real world ties like KYC and the only punishment is some internet # going down.

    Blockchain credit score only works when like you’re getting blacklisted from defi protocols or CEXs function as a debt collection agency for anyone with a bad credit rating trying to cash out into the real world.

    If I can say, put down $20K collateral and you’ll give me $60K and there’s no way you can sue me in real life… and the only punishment for not paying it back is protocols being like, “well we won’t do under collateralized loans with him again!”? Lol, I’m fine with that. I think many people would be fine with that and would happily take a horrific blockchain credit score if it impacts nothing in the real world and lets them double or more their crypto portfolio in an instant.

    Only works imo if that bad credit score has impact like DEXs are blocking you or CEX won’t take your funds and MM won’t let you operate with them and real life places that accept crypto refuse to work with your address. If there’s no impact then these protocols will crash and die quickly from people like me seeing easy money and taking it.

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  2. I’ve said it before and I’ll say it again, but louder. ON CHAIN CREDIT SCORES FLY IN THE FACE OF THE WHOLE DEFI MOVEMENT. The credit system in place in TradFi is deeply flawed. Bringing this shit into DeFi is just turning it back into TradFi. If I was a power tripping mod I’d just start deleting these posts. But I want balanced discussion. Nevertheless, on chain credit scores are the worst idea to come to the space.

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  3. Under-collateralized loans without kyc isn’t a viable model. On-chain credit scoring without kyc would allow for very, very easy fraud, where an malicious actor could just fake reliability. Because of this, the model would quickly become one where you establish a kyc’d identity tied to specific addresses and a credit score would be built on top of that, essentially just transitioning back into TradFi.

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