Peer-to-peer lending

Aave taps Pocket Network to beef up decentralized app development

Aave will leverage Pocket’s distributed network of 44,000 nodes to access on-chain data from various blockchains.

Aave (AAVE), an open source decentralized finance (DeFi) protocol, is teaming up with decentralized Web3 infrastructure provider Pocket Network to offer developers increased scalability and ease of use when building decentralized applications (DApps) on the Aave Protocol.

According to the statement on Tuesday, Aave will use Pocket’s distributed network of more than 44,000 nodes to access on-chain data from various blockchains to power decentralized applications. Developers building Aave-powered DApps may now access blockchain data from Pocket Network on demand following the new integration. Michael O’Rourke, CEO of Pocket Network, remarked that:

“The goal is to power the next wave of decentralized applications that combine Aave’s best-in-class liquidity market with Pocket’s unrivaled RPC coverage, which now supports 50 blockchains and is well on its way to achieving its goal of 100 blockchains in 2022.”

Aave Grants DAO made this agreement possible by providing a grant for the purchase of the required Pocket Network’s native token POKT for Aave’s frontend traffic. To meet its demands, Aave currently utilizes several Remote Procedure Calls (RPCs) from various infrastructure providers. Because these solutions have varying degrees of reliability, they can occasionally become unruly and cause user experience to deteriorate.

The new connection with Pocket Network is intended to alleviate these problems by offering Aave a more stable and durable infrastructure solution for its decentralized apps.

According to Defi Llama’s analytical data, Aave is the third most valuable protocol in terms of total value locked (TVL) ranking, having a current price of $95.91 and a total value locked (TVL) worth of $6.1 billion as of writing. Aave’s liquidity is derived primarily from Ethereum (ETH) and Polygon (MATIC), as the majority of its operations span multiple blockchains. Pocket Network also offers dedicated RPCs for these networks, lowering latency, improving uptime and providing optimized multi-chain data services.

Cred Protocol unveils its first decentralized credit scores

Releasing the results of its first credit score on the Aave Protocol, a decentralized credit scoring mechanism called Cred Protocol is set to expand to Compound and MakerDAO.

Cred Protocol, a decentralized credit scoring startup has unveiled the results of its first automated credit scoring system for users of decentralized finance (DeFi).

Cred Protocol CEO Julian Gay outlined the results in a Twitter thread, which showed how Cred successfully utilized past transaction behavior on the Aave protocol to assess the creditworthiness of future borrowers based on on-chain behavior in the DeFi space.

1/ Over the last few months, we’ve been working to build one of the first credit scores for DeFi.

Today, we’re excited to share the results of our first credit score with the world!

Read more below

— Julian Gay (@juliangay) July 14, 2022

By using machine learning to assess time-based account attributes and analyze the user’s past transaction behavior, Cred Protocol generates a health factor score that predicts the likelihood of future liquidation for a single address, which, according to Gay, was one of the strongest baseline creditworthiness predictors.

Cred Protocol claims to make decentralized finance more accessible to the world by implementing trustworthy credit scores that would see “anyone with an internet connection” and “a good financial reputation” gain access to loans.

Where borrowers and lenders have their loan worthiness assessed by a central authority such as a credit bureau, DeFi makes it possible to run financial services with a peer-to-peer (P2P) system, eliminating the idea of an intermediary or central authority.

Prominent DeFi researcher Chris Blec raised concerns that a borrower could use multiple Ethereum addresses to skirt credit scoring — to which Gay responded that a potential solution was in Beta.

So it’s just a credit score for that 1 Ethereum address? What if someone uses 10 different addresses?

— Chris Blec (@ChrisBlec) July 15, 2022

Cred Protocol is a small nine-person team based out of San Francisco with additional “hubs” in New York and London. However, Gay says that he aims to bring DeFi technology to more than one billion people.

In a Medium post, Cred outlined its plans to grow from the Aave protocol and expand its data analysis to other lending protocols like Compound and MakerDAO.

Two years ago, blockchain lending protocol Teller raised $1 million in a seed funding round to incorporate traditional credit scores into DeFi.

In November 2021, Credit DeFi Alliance (CreDA) officially launched a credit rating service that would ascertain a user’s creditworthiness with data from multiple blockchains. CreDA was developed to work using the CreDA Oracle by evaluating records of past transactions carried out by the user across several blockchains with the help of artificial intelligence (AI).

Recently, P2P lending protocol RociFi labs concluded a seed funding of $2.7 million in partnership with asset management firm GoldenTree, which is aimed toward expanding on-chain credit ratings for decentralized finance.