Cred Protocol Disclosed Its First Decentralized Credit Scores

Cred Protocol creates a health factor score that forecasts the likelihood of future liquidation for a single address using machine learning to evaluate time-based account attributes and analyze the user's past transaction behavior. According to Gay, this score was one of the most effective baseline predictors of creditworthiness.

Global Access To Decentralized Finance

Cred Protocol states that it will increase global access to decentralized finance by introducing reliable credit scores that allow "anyone with an internet connection" and "a strong financial reputation" to obtain loans. DeFi makes it feasible to run financial services with a Peer-to-Peer (P2P) system, eliminating an intermediary or central authority where borrowers and lenders have their loan worthiness assessed by a central authority such as a credit bureau.

In a Medium post, Cred described its plans to move beyond the Aave protocol and extend its data analysis to additional loan protocols, including Compound and MakerDAO.

Credit DeFi Alliance (CreDA) formally introduced a credit rating service in November 2021 to determine a user's creditworthiness using information from several blockchains. CreDA was designed to work with the CreDA Oracle by analyzing historical user transactions across many blockchains using artificial intelligence (AI). To enhance on-chain credit ratings for decentralized finance, P2P lending protocol RociFi Lab has completed a seed funding of $2.7 million in collaboration with asset management company GoldenTree.