DeFi platform says credit scores could expand use cases for crypto loans

A DeFi platform that supports cross-chain collaboration between products based on different blockchains says more than $140 million of assets have been deposited in its ecosystem.

Wing says it is aiming to build a decentralized governance model and risk control mechanism to “promote an equally beneficial relationship between borrowers, creditors and guarantors”

Those who own WING tokens can participate in the decentralized autonomous organization’s governance and vote on the launch of new projects as well as how the DAO’s community fund should be distributed.

They are also encouraged to make new product proposals to ensure that better DeFi products are built — services that the community will use the most.

Built on Ontology

Wing has been built on the Ontology blockchain, and will make use of the network’s decentralized identity mechanism, which is known as ONT ID. This, when coupled with the decentralized data framework DDXF, will mean that credit data can be automatically verified and evaluated through smart contracts.

The platform is also planning to integrate credit scores into the design of its products — meaning that it will be easier than ever before to see a full picture of a person’s financial history. Wing explains that none of this will be at the expense of privacy, as only necessary information will be shared whenever an application is being made.

“Ontology is really excited to work with Wing to further our shared vision of accelerating the DeFi movement across the globe,” Ontology founder Li Jun said. “I believe OScore in particular will prove an important tool for the design and execution of credit-based DeFi products. By using Ontology’s OScore, the level of risk experienced by lenders utilizing Wing’s technology will be vastly reduced as transparency and trust are greatly increased, and correct due diligence can take place.”

A live AMA

Erick Pinos, an advisor at Wing Finance, recently discussed the new project during a live ask-me-anything session that was broadcast on Cointelegraph’s YouTube channel.

When asked why credit-based lending is important to the growth of DeFi, Pinos explained: “DeFi relies on collateralization because a lot of it is anonymous. [...] You always have to put in more than you borrow. There’s a limit there because that’s a specific type of loan. If I put up $10,000 to borrow $5,000, that cuts out a whole lot of use cases.”

As Pinos noted, many people wouldn’t be interested in putting up $10,000 to borrow $5,000 in order to buy a car, for instance — they’d just use the cash they already have.

“What we want to push towards is all these other use cases for loans,” he added. “I can go to the blockchain with nothing but my credit score, and maybe a little bit of collateral, and I can borrow more at a better rate than a predatory loan company — and I can actually use that loan in the real world to pay off a mortgage, or pay for tuition, or start a new business.”

Pinos said Wing aims to be more inclusive and ensure that DeFi can be used in the real world.

He added that one of the biggest priorities for Wing is increasing the types of collateral that are accepted — giving crypto enthusiasts more opportunity to get their assets to work for them.

“Having more collateral types is only going to help get that TVL up because not everyone wants to convert into Bitcoin or Ethereum [...] to provide that supply,” Pinos noted.