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.”
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.”