Cryptocurrency Lender Divine Grants 30,000 Loans Utilizing Iris Scanning for World Identification verification
In the rapidly evolving world of decentralized finance, a new player has emerged, offering high-yield returns to retail investors. Divine Research, a crypto lending platform, is targeting underserved individuals in developing countries who lack access to traditional banking services.
The platform uses World ID, a biometric iris-scanning platform developed by Sam Altman’s Worldcoin, to verify borrower identities and prevent fraud or multiple accounts after defaulting. This innovative verification method enables uncollateralized lending without the need for conventional credit checks.
Divine Research's primary focus is on issuing small USDC stablecoin loans, mostly under $1,000, to gig workers, educators, and vendors in need of quick capital. Since December, the platform has issued over 30,000 such loans.
However, the high-risk nature of these loans is reflected in the interest rates charged. With rates ranging from 20% to 30%, Divine Research aims to cover potential losses due to the high default rate, which stands at around 40% for first-time borrowers.
To mitigate losses, borrowers receive World tokens, digital assets distributed as part of their loan repayment incentives. Partial recovery of these tokens helps offset default losses. This unique approach, dubbed "microfinance on steroids," combines high-interest charges with token incentives to maintain profitability.
Profit for retail investors, the liquidity providers, is ensured by carefully balancing the interest income against the expected default rate and factoring in the partial recovery of value through World tokens. The model bypasses traditional institutional intermediaries, sourcing capital directly from retail investors seeking high-yield returns in a decentralized manner.
Key Points
- Target borrowers: Underserved individuals: gig workers, educators, vendors with limited traditional credit access.
- Identity verification: World ID biometric iris scan prevents fraud and multiple accounts.
- Loan details: Collateral-free, ~30,000 USDC microloans issued, mostly <$1,000.
- Default risk: Around 40% default rate on first-time loans.
- Interest rates: High fixed rates of 20–30% to cover potential losses.
- Loss mitigation: Use of World tokens distributed to borrowers, partially reclaimed to offset defaults.
- Investor profit assurance: Interest + token recovery structured to exceed expected losses, ensuring profit for retail lenders.
- Lending framework: Decentralized peer-to-peer, bypassing traditional banks and institutions.
This combination of biometric identity verification, high-yield interest rates, token incentives, and a decentralized model allows Divine Research to serve high-risk borrowers profitably and gives individual investors access to high-return crypto lending opportunities.
Meanwhile, established institutions like JPMorgan are experimenting with Bitcoin-collateral loans, indicating increased institutional adoption. Startups like 3Jane and Wildcat are also pushing the boundaries of uncollateralized crypto loans, similar to Divine, suggesting that the crypto lending sector is set for continued growth.
In the crypto and decentralized finance sector, Divine Research's crypto lending platform aims to provide high-yield returns to retail investors by serving underserved individuals in developing countries, using technology like World ID for biometric identity verification. The platform mainly focuses on issuing small USDC stablecoin loans to gig workers, educators, and vendors who lack traditional credit access, but the high-risk nature of these loans is reflected in the interest rates charged, ranging from 20% to 30%. To mitigate losses, borrowers receive World tokens as part of their loan repayment incentives, which can partially recover their defaulted loans. This unique approach of combining high-interest rates and token incentives ensures profit for retail investors, bypassing traditional institutional intermediaries and making crypto investing an attractive proposition.
