CreDA (Credit DeFi Alliance), launches the world’s first decentralized credit service to improve the savings and loans system in crypto. This platform uses artificial intelligence (AI), to give credit ratings using traditional and on-chain financial data.

CreDA, a decentralized credit startup, has officially launched its credit rating system after an open beta period. Released by CreDA, it states the protocol will improve and personalize credit ratings of users within the DeFi ecosystem. Users can then borrow from participating platforms under collateralized or uncollateralized loans.

CreDA was launched on Thursday, Thanksgiving Day, Thursday November 25th. It uses blockchain technology to create a trust structure to support the DeFi lending community and connect traditional lending systems to on-chain ones. The platform will simplify users’ transactions, minimize risk for lenders and boost access to capital via undercollateralized and non-collateralized loans.

While the world is rapidly adopting decentralized financial applications and cryptocurrencies, people’s on-chain assets and financial history don’t cross over into traditional financial markets, so they may still find it difficult to receive loans. People with great credit might find it hard to get into the DeFi market. Lending platforms demand overcollateralized loans. Borrowers are required to usually post up to 50% of their collateral. This can cripple the financial system and prevent people with high credit scores or those who are in need of capital.

As Cassie Zhang, CreDA’s Chief Operating Officer explains, credit ratings are a clear solution to the over-collateralization of loans and expects CreDA to lead the field in introducing a new credit scoring system.

“The introduction of CreDA Credit Scores will enable unprecedented imagination and innovation to protocol users and developers alike.” Hofbauer adds, “But more importantly, CreDA fulfills the promise of blockchain and decentralized finance, providing the trust architecture needed to unlock capital for the billions of people without access to traditional banking.”

With leadership from North America and Europe and developers in Asia and North America, the global organization aims to offer a platform that integrates traditional credit data and on-chain credit data. This will allow more people access to capital via traditional banking or DeFi lending protocols. As the world shifts towards digital assets and the metaverse, it aims to improve credit opportunities and capital access.

Built on Arbitrum One, layer 2, the platform obtains data on a user’s on-chain financial behavior and assets using the CreDA Credit Oracle (NYSE:), which employs AI to examine users’ transaction history across multiple blockchains. The data is used to calculate the users’ credit scores which are minted into a unique Credit NFT (cNFT). The cNFT is used on different platforms to authenticate the borrower’s credit score, unlocking incentives and loans on different DeFi lending platforms.

You can also use your cNFT with partner platforms to receive the same benefits as before, along with other incentives. At launch, CreDA’s partners include UniSwap, SushiSwap, Elastos, FilDA, PolyNetwork, O3 Swap, WePiggy, Channels, and dForce.

According to CreDA’s developers, the Credit Oracle has already retrieved the data of billions of on-chain activities related to more than 50 million addresses. With this large pool of data, CreDA has built a trustful and reliable credit model. This will improve as users continue to connect with other people and increase their credit scores. Future off-chain data from traditional sources will level up CreDA’s Credit Rating dramatically as well.

The cNFT provides users with access to higher lending rates and preferential margin rates. They also have better credit ratings. There are also incentives that can be used based on credit scores. This platform eliminates geographic barriers to borrowing because anyone can access it from anywhere and obtain a credit score. William Zhang from The World Bank Group Washington DC spoke about CreDA.

“While blockchain and DeFi have helped democratize data and finance, there is still a lack of trust that can be limiting for people without existing collateral. But a solution that provides access by rewarding good behavior, either on-chain or off-chain, and allows new users to earn trust within the system, could unlock new possibilities for nearly 2 billion people around the world.”

CreDA’s future is bright as millions of people around the world need credit scores in order to obtain non-collateralized or under-collateralized loans. Through the use of W3C compliant Decentralized Identities (DIDs), CreDA can establish financial identities for the world’s “unbanked” population adding an extra $250 billion to global gross domestic product (GDP). Borrowers without access to banking or traditional finance can receive billions of dollars worth capital. Furthermore, on-chain users who are virtuous can use their transactions to improve credit scores. This increases access to DeFi loans and traditional finance.

Continue reading on BTC Peers