New DeFi ‘passport’ could enable under-collateralized crypto loans

New DeFi ‘passport’ could enable under-collateralized crypto loans


Decentralized finance (DeFi) protocol Arcx has announced the launch of Sapphire v3, a DeFi passport allowing crypto users to pseudonymously build and verify their reputation on-chain.

Announced June 2, the DeFi passport will score users on a scale between 0 and 1,000, with Arcx advancing that the passport “incentivizes reputation-building and curates on-chain identity into DeFi.”

In the absence of a DeFi passport, Arcx asserts that “protocols are left to treat every user the same, occasionally giving preferential consideration to wallet size, institutional backing, or restrictive KYC.”

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Arcx expects its passport will be integrated onto many DeFi protocols, predicting Sapphire will allow projects to offer “low-collateral loans and high-yield farms” targeting users with high credit scores. As such, Arcx’s passport could facilitate growth in the emerging sector of DeFi-powered under-collateralized loans.

Speaking to Cointelegraph, the CEO and co-founder of institutional under-collateralized loan protocol Maple Finance, Sidney Powell, commented that “Arcx’s passport will help bring under-collateralized loans closer for retail DeFi users.”

Although Powell

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