Would you share your credit score to put down less collateral on a DeFi loan? The team at Reputation DAO believes demand is high for such a service. They have partnered with Chainlink to help keep it secure.
An ambitious new decentralized autonomous organization has built a data service for lending platforms that records a user’s financial reputation to reduce the amount of collateral needed for a loan.Users of Reputation DAO will have traditional financial data such as anti-money laundering and know-your-customer , credit scores and banking data tied to their account.
Decentralized finance protocols such as AAVE and Maker require users to put down at least 150% the value of the loan they wish to take out. This overcollateralization protects the protocols from insolvency in the case of liquidations due to volatility since the loans are made through zero knowledge smart contracts.
That institutional interest is clearly demonstrated by the $222 million of seed and strategic funds invested in DeFi protocols since March 15 according to crypto fundraising tracker. Reputation DAO is one of those protocols and closed a $4.7 million seed round on April 13 led by Chainlink co-founder Sergey Nazarov and AirTree Ventures.
Reputation DAO assured Cointelegraph that its partnership with the industry leading information oracle Chainlink, which uses the privacy-preserving protocol DECO, helps keep its users’ data secure.
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