According to the World Bank, over 2 billion people in all of world lack access financial and working capital. Yet records show that only 67% of the world’s adult population is covered by credit bureaus across the globe.

It seems that the biggest obstacle to increasing loan availability is inability to establish accurate and reliable credit score systems. When it comes to credit scoring, one size simply doesn’t fit all.

Credit scoring systems in traditional finance are heavily centralized and have a complex overall structure. Although these systems are becoming more popular, there are risks of manipulation. Most borrowers will be left out.

Although decentralized financing options may be an option, there are many overcollateralized platforms in the sector that reduce access to working capital.

Sublime is a soon-to-be-launched decentralized credit system that solves the problem of over-collateralization as well as over-reliance on centralized credit scoring systems. Let’s take a look at the future debt products.

Sublime:

Sublime, a DeFi native app built on blockchain, is made up of an interconnected system that together make up a decentralized lending platform. Borrowers can use their digital identity to get loans.

Sublime is a better alternative to traditional credit scoring systems that are highly centralized or overcollateralized borrowing protocols as the norm on most DeFi platforms. It allows borrowers to leverage their social media accounts to borrow money from trusted lenders.

It allows users to build their reputation organically but also decentralized. Sublime even allows them to leverage NFTs, and other blockchain assets as collateral.

Sublime: How Does It Work?

Sublime is a community of individuals that crowdsources credit scores through user feedback. You can have loans in a pool structure, where many lenders fulfill a single loan request. Or you could also use a credit line to allow for peer-to-peer borrowing and lending.

Sublime offers a configurable design for debt products with a composable framework. Third parties can use the open-source platform to support different purposes.

This flexibility allows lenders to use the network’s KYC system for additional KYC or work anonymously with whitelisted institutions. On the other side, decentralized autonomous organizations can borrow publicly from their communities.

Sublime works in the same way that miners verify transactions on Proof of Work networks. Sublime’s design allows special entities known as Verifiers to determine whether or not an identity map is valid. Initially, Sublime Foundation will verify the transactions. However, over time new Verifiers will be added to the network. They will also provide digital identity verification. The ecosystem will grow and more people will be involved in its governance.

DeFi Borrowing and Lending Protocol is not all that it seems

Sublime provides financial services, such as savings accounts and decentralized credit scores. Sublime integrates with the top DeFi protocols like Aave and Compound so users can put their collateral in DeFi pools and earn interest within Sublime. Users can increase the yield that they generate, thereby increasing capital efficiency.

Conclusion: The DeFi Lending and Borrowing Sector is entering a new era

Sublime has raised funding of $2.5million from investors such as FinTech Collective and Ryan Selkis.

Sublime facilitates a new, decentralized way for lenders to assess risk while providing borrowers with easy access and lower cost loans. Sublime will launch an alpha version and continue to raise funds.

While speaking at a press release, Sublime’s founder Ritik Dutta showed his excitement about the coming launch and remarked about how Sublime’s approach could potentially help solve issues with credit even beyond DeFi.

Sublime intends to launch its beta in the coming weeks. It will offer a limited number of users an opportunity to use its platform.

Continue reading on CoinQuora