Micro Lending Protocol With 20x Potential
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it’s Pick Day!
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Traditional credit markets are often inaccessible to many, emphasizing the need for alternatives in the crypto space.
In traditional finance, access to credit often requires a good credit score, collateral, and a lengthy approval process.
DeFi, on the other hand, aims to remove these barriers by offering decentralized lending solutions on platforms like Aave, Compound, and Maker.
However, the first-generation DeFi lending protocols still require users to overcollateralize their loans, making them inaccessible to those who lack crypto collateral.
The Solution: Undercollateralized Lending
An undercollateralized loan refers to a loan that is not fully / at all collateralized. Should the loan default, the collateral (if any) will not be able to fully cover the principal.
According to Defillama, lending is the second-largest segment in DeFi right behind Liquid Staking in terms of total-value-locked, boasting just over $22billion.
While that looks outstanding, it looks small compared to the $11 trillion credit market currently existing in traditional finance.
Undercollateralized lending may be crucial for the next stage of evolution in DeFi lending, allowing customers get loans without (too much) of the typical paperwork and bureaucracy of the conventional banking system imposes.
Here lies the opportunity of today’s pick.
Our next pick is a decentralized credit marketplace that offers permissionless crypto lending and borrowing services.
Now let’s tell you which project we are talking about and share the full investment case with you: