Digital lending platform Divine Research has launched an unbacked USDC micro-lending initiative targeting financially underserved populations, distributing approximately 30,000 small-value loans using iris-based World ID verification.
The platform issues loans under $1,000 in USDC stablecoin to individuals excluded from traditional banking systems, employing World ID’s biometric authentication to confirm borrower identities without collateral requirements. Loan interest rates range between 20-30%, with Divine Research reporting a default rate near 40%.
High interest charges compensate for defaults, and the platform distributes free World tokens to borrowers as an additional incentive. This model emerges alongside renewed institutional interest in crypto lending, with JPMorgan reportedly exploring Bitcoin-backed loans despite past failures in the sector.
The approach aims to replicate microfinance structures through cryptocurrency while addressing historical industry pitfalls highlighted by Celsius and Genesis collapses. Divine Research positions itself within the broader decentralized lending trend, allowing liquidity providers to directly fund high-risk crypto loans for profit.