Dragonfly, Scalar are backing a startup that calculates DeFi 'credit scores'
June 1, 2021, 3:56PM EDT
1 min read
An upstart crypto project is looking to add a bit more trust to the generally "trustless" market for decentralized finance.
ARCx revealed its new "DeFi Passport" Tuesday. With the DeFi Passport, users can leverage their on-chain activity to prove their creditworthiness and thus qualify for additional benefits across various crypto protocols — similar to how high credit scores can help investors clinch lower rates.
The project has clinched the backing of a number of big investors in the crypto market, including Dragonfly Capital and Scalar Capital. Those crypto funds poured $1.3 million in a recent round for the firm alongside LedgerPrime. To date, the project has raised $8.2 million.
A user's passport score will be based on a scale from 0 to 999, with the 999 score "being the most lucrative," according to a press release.
In an interview with The Block, ARCx founder Kerman Kohli said that projects can leverage the product to offer high score DeFi-era higher allocations or more leverage. "You can create a yield farming strategy that only targets users with the highest score," he said.
"The vision moving forward is to make the ARCx DeFi Passport and Credit Score a key lego-block within Decentralized Finance," the release added. "Beyond the initial proof of concept with the ARCx Credit Score, the opportunities for pseudonymous profiling and scoring of identities based on on-chain activity in a decentralized manner are endless."