We’re excited to close out what has been a momentous year for crypto and we’re looking forward to getting into 2023, but before we make the leap, we wanted to look back on what we’ve accomplished and thank you for your continuing interest and support!
We’re on a mission to bring trust and transparency to web3 by quantifying on-chain lending risk at scale. Our first product is a decentralized credit score that enables web3 protocols and web2 fintechs to make risk-based decisions, a critical piece of DeFi infrastructure that will be essential to safely expand access to DeFi lending to previously underserved individuals and businesses.
2022 was our first full year of operation and we covered a lot of ground! We closed a pre-seed funding round at the beginning of the year from top web3 investors including Alliance, Volt Capital, Luno Expeditions, SNZ Holding, AngelDAO, GSR Markets and incredible founder/operator angels. That enabled us to hire a stellar team (more on that later) and create the world’s first predictive credit score based on on-chain data which was well received by the DeFi community and was picked up by the crypto press (The Defiant, Coin Telegraph, Bitcoinist).
On the back of that interest we launched our Developer Portal (still in private beta, signup here if you’d like early access) to enable web3 projects to integrate credit scoring and credit reporting into their lending and identity protocols. We’re excited to be empowering Soul Bound Identities with masa.finance, Under-collateralized lending with Teller and enabling creditworthiness to be applied to KYC’d identities with Quadrata among other partnerships. Look out for details on mainnet launches in the New Year!
The beginning of the year saw us in an environment where everything was “up and to the right” and few questions were asked about how that growth was being driven, even though many industry participants were expecting the “wheels to fall off” at some point. Those expectations started to materialize as the first tremors of crypto quakes started to manifest with the Terra/Luna collapse, subsequent 3AC implosion, Voyager bankruptcy and of course, the FTX debacle.
It became all too clear that the risks were always there, they just weren’t readily visible. That lack of transparency in particular with the centralized exchanges (CeFi) was the catalyst for the high profile crypto failures we’ve seen this year. DeFi, built on the inherent transparency of the blockchain (and over-collateralized lending structures) has emerged largely resilient, but there’s been an acknowledgement across the whole industry that the quantification of risk across multiple dimensions will be essential to empower the next wave of crypto growth and adoption.
We’re playing our part by helping lending protocols, identity protocols, DAOs, and wallets make risk-based decisions using real-time credit scoring and on-chain data. Our APIs and credit oracles allow for the permissionless integration of credit risk wherever risk-based decisions need to be made.. hint: everywhere!
Customer success stories
This year we supported great partners across lending (teller.org), identity (masa.finance, quadrata.com, convo.space) and we have a number of wallet integrations in the works. In addition to the exciting developments in web3 , we’re also well on the way to bridging the web2-web3 divide by enabling on-chain activity to inform traditional credit risk decisions. Alongside our partners, we’ll be publishing more details in Q1, but I wanted to share a couple of examples so you can see how credit risk is enabling new web3 experience:
With Teller.org and Quadrata we’re enabling un-collateralized lending based on an account’s creditworthiness. Cred Protocol provides the credit scoring and monitoring capabilities to qualify loan applicants and enable the credit decisioning process to inform the loan terms. Loan performance and impacts to creditworthiness are monitored via our on-chain analytics which include activities across chains, lending protocols and versions. We’ll have more to details to share shortly!
Masa.finance are pioneering the Soul Bound Identity (an implementation of Vitalik’s Soul Bound Token concept), an NFT embodiment of on-chain identity. One of the core use cases is enabling access to under-collateralized loans in developing countries like Nigeria which haven’t been well served by traditional banking and credit infrastructure and where 6.3% of the population (~13.3m people) own digital currencies. Cred Protocol enables previously underserved communities to leverage their on-chain history to establish a credit score and qualify for financial products. Together with masa.finance, we’re expanding financial inclusion.
We’ve assembled an incredible eight person product and engineering team with hubs in San Francisco, New York and London, hailing from Cambridge University, Oxford University, UC Berkeley and University College London (UCL). Together we’re combining traditional finance and fintech experience from institutions such as Deutsche Bank, Barclays Capital and Atom Finance with “at scale” data analytics and machine learning from Meta, Amazon and Twitter to mitigate web3 risk and expand safe access to DeFi lending.
We’re excited for 2023 and for the opportunity to provide more insight into on-chain credit risk and to help bring a bit of civilization to the “wild west” of crypto, which will certainly be necessary for DeFi to regain trust and ultimately gain mainstream acceptance. We’ll continue on to provide the most informed credit scoring infrastructure available by analyzing activity across chains, protocols and versions and we’ll incorporate off-chain financial data (with our user’s permission) to enable: credit decisions for brand new users, users with established credit to efficiently engage with DeFi products and for crypto-native users who’d like to leverage their reputation and assets in the traditional financial world.
So from all us at Cred Protocol, we wish you a Happy and Prosperous New Year and we’re looking forward to helping you in any way we can in 2023.