Divine Research Uses USDC for Unbacked Loans Verified by World ID, Targeting Underserved Borrowers
Main Idea
Divine Research has issued 30,000 unbacked USDC loans verified by World ID, targeting underserved borrowers with microfinance-style crypto lending at 20-30% interest rates.
Key Points
1. Divine Research uses World ID, an iris-scanning identity verification system, to issue unbacked USDC loans under $1,000 to individuals excluded from traditional banking.
2. The platform reports a loan default rate near 40%, with high interest rates compensating for losses and free World tokens given to borrowers.
3. JPMorgan is reportedly considering Bitcoin-backed loans, indicating renewed institutional interest in crypto lending.
4. Past failures in crypto lending, such as Celsius and Genesis, highlight the need for robust verification systems and clear lending protocols.
5. Divine Research's model allows liquidity providers to profit from funding high-risk crypto loans, part of a broader trend in decentralized lending.
Description
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