Smart Credit Scores on Cardano with Oceidon
Smart Credit Scores on Cardano with Oceidon
As DeFi continues to expand, there are a number of financial services that are still being transitioned to the blockchain in order to unlock full financial control over one’s assets. The latest development comes from Oceidon who has just announced the start of their new smart credit score which calculates on-chain data in order to provide a credit score through their protocol that can assist with taking out cryptocurrency loans.
Blockchain credit scores
Oceidon uses a variety of metrics to determine the scores that they give out to individual wallet addresses. They are based on factors including Oceidon loyalty, your NFT collection, and speculation activity on various cryptocurrencies.
With this score, users will then be able to show creditors (A.K.A. smart contract protocols) their rating in order to determine just how much liquidity they can request for a loan which will add a new layer of investing opportunities for people that use debt in a positive manner for acquiring different tokens and coins on the blockchain, similar to real estate investing.
However, there is some concern over the issue that loyalty plays a role in the credit score being generated. In a decentralized environment, the frequency of using Oceidon should play little to no factor at all when requesting a loan from a DeFi protocol that is not associated with Oceidon.
Leaning on a third party for assistance removes the benefits of peer-to-peer finance by requiring all of one’s activity to flow through Oceidon before applying for a loan. For this system to evolve, there needs to be a more universal approach that doesn’t bottleneck loans through a single platform that rewards loyal users over ordinary users.
Is Cardano on the rise?
The most interesting aspect to note about this project though is that Oceidon is being built for the Cardano network which has received a lot of criticism from various blockchain communities for lacking a lot of notable features which other chains already possess such as vibrant communities, strong utilities and smart contracts, and meaningful projects for a blockchain network that ranks within the top 10 cryptocurrencies with a market cap above $10 billion.
While the coin has dropped in price as badly as most other cryptocurrencies this year, they failed to capture a sizable portion of the market in 2021 during the massive bull run which saw other cryptocurrencies such as Ethereum, Solana, and Dogecoin all reach massive highs.
However, as we’ve seen so many projects from 2021 collapsing and failing (especially NFTs), the lack of excitement on the Cardano network during 2021 may be a good thing for the protocol as it aims to continue improving its network in 2023 with this new credit scoring system, a functioning NFT marketplace at JPEG.store, a new stablecoin called Djed set to begin in on the Cardano blockchain in January 2023, among other things.
Although the butt of many ill-jokes from people like Alex Becker and Wab.Eth, Cardano has the opportunity to become a sleeping giant as their network continues to show less cracks in the system, unlike Solana and TerraLUNA which have both suffered tremendously due to poor projects and partnerships.
