Credit is essential for any modern financial system to function properly. The issuance of credit has historically been monopolized by a few dominant financial institutions leaving smaller participants as onlookers.
The developers of Zoracles Protocol are committed to democratizing credit by developing a unique algorithm to assess creditworthiness. The initial release of Zora showcases their initial effort to assign a credit rating to each Ethereum address. Accounts with a longer history and verified transactions will accrue greater trust over time. At the moment, ratings are calculated between 0 – 100.
Over the next several months, The Zoracles Development team will build liquidity pools for participants to contribute small amounts of crypto in exchange for credit lines and higher trust scores. An API will be built for other dApps to use this metric in lending protocols that could benefit greatly by assessing individual creditworthiness.
Credit ratings will be an integral part of the blockchain ecosystem as platforms like AAVE continue to grow in size, importance and total value locked. The team expects their native Zora dApp to attract substantial users with its issuance of credit lines without collateral. Currently, you need collateral to borrow crypto from dAPP marketplaces such as Compound or AAVE. This favors large holders or whales, in accessing sizeable crypto loans.
Zoracles Protocol believes it is building the solution with an algorithm strong enough to accurately identify credit risks and assign weighted signals to build decentralized trust. The developers are focused on their native credit rating as a major first step in realizing credit lines without collateral.
Democratizing access to credit is one of the core missions of Zoracles Protocol and their new product Zora. A decentralized financial system will need credit ratings for individuals that don’t have the collateral to access funds with lending marketplaces.
The founding team consists of informational retrieval engineering talent that deeply understands the importance of a strong fundamental algorithmic approach to solving problems. Once proven to accurately assess credit risk, Zora API will likely become ubiquitous across the DeFi lending landscape.
Typical of any Zoracles product, privacy and confidentiality will be an important element. The team has developers working on a ZK-Snark that will hide the user’s credit rating once credit is issued to an Ethereum address. The team wanted an early preview for users to retrieve their blockchain credit rating as determined by on-chain factors such as age of address, recent transaction history and Ethereum balance. This is an important step in solving creditworthiness algorithmically and will lead to future credit lines for accounts that qualify.
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