These hurdles are:
1) Over-capitalisation: this concerns the requirement by many DeFi loan platforms for potential borrowers to offer a greater amount in crypto than the loan being sought. This greatly restricts the number and type of users who qualify for loans, while further restricting the size of the loans that can be made.
2) The part-solution to this problem is to introduce risk estimates/risk scoring with a view to offering under-collateralised or 0 collateralised loans. However, the basis for this risk scoring is largely fractured across many potential solutions, and therefore lack of faith in repayments being met further restricts loans to smaller loan amounts and a smaller pool of potential borrowers.
Decentr solves both of these hurdles with our dLoans feature as part of a broader, integrated dFintech solution:
1) Over-capitalisation is unnecessary with dLoans, because;
2) On Decentr, a user’s DecID captures data generated by the user and stores it 100% securely, as well as storing ID and other documents uploaded by the user. DecID is expressed as an economic value, which we call a user’s “Personal Data Value”, or “PDV. PDV functions as a personal “exchange rate” assigned to each user that is determined by a user’s positive Internet usage and engagement, as expressed in data.
PDV can be applied across many Decentr dFintech features to a user’s economic advantage. In the case of borrowing, PDV is used on Decentr as a highly granular risk score, meaning that high PDV not only gives users access to 0 collateralised dLoans, but can also be applied to improve APR on the loan being taken out, while also reducing overall dLoan payments in direct correlation to a user’s fluctuating PDV.
Loaning out DEC
Users can also loan out DEC from their dWallets at an aggregate system APR. However, users with a PDV higher than the system aggregate can apply this to receive a correspondingly higher APR.
Better yet, as PDV is a protocol-level feature, the benefits of PDV can be ported across to many of the solutions we are building on, including Holochain, TomoChain and other DeFi solutions such as Aave and Compound (see below for Key Stats).
We look forward to answering all your questions. Please find our official links below.
Official Links for Decentr:
Official Email Address: Admin@decentr.net
Official Website Link: https://decentr.net/
Official Telegram Discussion Group: https://t.me/DecentrNet
Official Telegram Announcements Channel: https://t.me/DecentrAnnouncements
Official Twitter: https://twitter.com/DecentrNet
Official Medium: https://medium.com/@DecentrNet