This article was first published on OntologyNetwork - Medium
A byline by Erick Pinos, Ontology’s America’s Ecosystem Lead
By Erick Pinos, Advisor at Wing, a credit-based cross-chain DeFi lending platform built on Ontology, and Ontology’s America’s Ecosystem Lead
The total value locked in DeFi projects is an estimated $38 billion, while CoinMarketCap estimates that the total market capitalization of DeFi tokens is nearly $70 billion. For reference, $70 billion is nearly the same amount as the entire GDP of Luxembourg, and more than the respective GDPs of Bulgaria and Croatia, per statistics from the World Bank. In short: DeFi is massive, and expanding by the day. Its expansion over the last few years has seen the advent of new technologies and better ways of managing finances: new ways of financing projects, borrowing, lending, betting, investing; the possibilities are endless. The rapid growth of DeFi has, however, highlighted some innate problems in the industry, most notably when it comes to credit scoring. It was for this reason that we developed Ontology’s OScore protocol in 2020, a self-sovereign credit evaluation system based on user data stored on the Ontology blockchain.
For years now, lending and borrowing offers individuals a vast array of new opportunities in which credit scoring plays an integral role. This makes OScore a vital missing piece to the DeFi’s puzzle, because in order to offer these products, this vital data is required so that they can be assured the purchaser or borrower will be reliable and in a position to repay them.
In traditional finance, the cross section between off-chain and on-chain assets and actions is not adequately established to allow users to benefit from on-chain actions while keeping their personal data safe when it comes to credit scoring. Most platforms require access to the user’s off-chain information, while their on-chain data provides insight to the platform into ...
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OntologyNetwork - Medium