Cred Protocol unveils its first decentralized credit scores

Cred Protocol, a decentralized credit scoring startup has unveiled the results of its first automated credit scoring system for users of decentralized finance (DeFi).

Cred Protocol CEO Julian Gay outlined the results in a Twitter thread, which showed how Cred successfully utilized past transaction behavior on the Aave protocol to assess the creditworthiness of future borrowers based on on-chain behavior in the DeFi space.

1/ Over the last few months, we’ve been working to build one of the first credit scores for DeFi.

Today, we’re excited to share the results of our first credit score with the world!

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— Julian Gay (@juliangay) July 14, 2022

By using machine learning to assess time-based account attributes and analyze the user’s past transaction behavior, Cred Protocol generates a health factor score that predicts the likelihood of future liquidation for a single address, which, according to Gay, was one of the strongest baseline creditworthiness predictors.

Julian Gay Twitter Post 

Cred Protocol claims to make decentralized finance more accessible to the world by implementing trustworthy credit scores that would see “anyone with an internet connection” and “a good financial reputation” gain access to loans.

Where borrowers and lenders have their loan worthiness assessed by a central authority such as a credit bureau, DeFi makes it possible to run financial services with a peer-to-peer (P2P) system, eliminating the idea of an intermediary or central authority.

Prominent DeFi researcher Chris Blec raised concerns that a borrower could use multiple Ethereum addresses to skirt credit scoring — to which Gay responded that a potential solution was in Beta.

So it’s just a credit score for that 1 Ethereum address? What if someone uses 10 different addresses?

— Chris Blec (@ChrisBlec) July 15, 2022

Cred Protocol is a small nine-person team based out of San Francisco with additional “hubs” in New York and London. However, Gay says that he aims to bring DeFi technology to more than one…


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