The first soulbound identity protocol for the Ethereum mainnet has been released by Masa Finance
The protocol will enable the issuance of standardized soulbound tokens for Know Your Customer (KYC) verification, credit ratings, and other use cases on Ethereum.
A soulbound token is a publicly verifiable and non-transferable nonfungible token (NFT) that represents an individual’s credentials, affiliations and commitments. Tokens that are soulbound cannot be moved from one wallet to another.
Brendan Playford and Calanthia Mei, the founders of Masa Finance, asserted that soulbound tokens will increase the chances for DeFi users to establish credit and obtain loans.
With the use of a Web3 credit score and the data sources they have combined from Web2 and Web3, they seek to assist consumers in accessing an on-chain credit system and establishing their creditworthiness. They are currently giving DeFi loans to people who have a Masa credit score report through their collaboration with numerous lending partners.
Masa soulbound tokens are not just linked to a standard credit score, she emphasized. The protocol incorporates Web2 and Web3 activity in addition to conventional finance. Mei said that more than 10,000 data points, including a user’s FICO score, Plaid transaction data for credit and debit cards, Web3 wallet transaction history, centralized exchange balances, and other information, are combined to create a Masa credit score.
Mei thinks that this method will enable “risk-based underwriting – This risk is assessed based on the relevant information about the person applying for insurance. Insurers therefore base the decision on whether and how to insure an applicant on data relevant to the risk the insurer takes on. This process is known as risk-based underwriting.” in DeFi, which she claims was previously impossible since blockchain networks lacked identity protocols.
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