A decentralized credit scoring platform has recently published its results as the world’s first and foremost credit scoring system. It was made specifically with DeFi users in mind and wanted to promote fair practices and help people not get scammed in the DeFi space.
Julian Gay the CEO of the Cred Protocol published results in a tweet and how Cred used past transaction history to computer the creditworthiness of people. I also analyzed the on-chain behavior of the person and makes sure that the future borrower is trustworthy.
The platform uses machine learning to majorly takes into account the attributes and behavior of the user’s past transactions. After all this, it will compute a health actor score that will then predict the likelihood of liquidation in the future. According to the CEO Julian Gay, which happens to be the most essential indicator of creditworthiness.
The Cred Protocol is aimed at making decentralized finance much more accessible than it is right now. It will give out credit scores just like the real-world financial institutions right now and anyone with a good reputation can get access to crypto.
With P2P being the main focus on the Cred Protocol can avoid being a central or intermediary body, thus being true to the DeFi roots. But experts pointed out that the person can cheat the Cred system by using multiple ETH addresses, but Julian replied that a solution is in the works. While the solution for the multiple addresses is being beta tested you can find peace in the fact that crypto is becoming more accessible and reliable.