TransUnion and Spring Labs partnered to launch combined digital passports for cryptocurrency lending and borrowing
Partnership
Spring Labs’ new ky0x Digital Passport will make TransUnion’s off-chain analytics and insights available on-chain.
The measure, originally reported by the Wall Street Journal, should make it easier for lenders to assess the risk profiles of bitcoin investors wanting to borrow funds. As a result, some investors may be eligible for cheaper borrowing rates or loans without having to put up bitcoin or other digital assets as security. The shift opens up a new universe of permissioned and reputation-based goods and features, as well as better-informed, privacy-preserving DeFi and Web3 apps.
Users may enhance the rates they’re provided by DeFi lenders using VantageScore credit scores on-chain, and DeFi lenders can minimize their own risk while raising their available liquidity. VantageScore is widely used by the most innovative financial technology providers and is a trusted risk management tool for more than 2500 financial institutions in the United States due to its state-of-the-art model architecture, market-leading predictive performance, and inclusive ability to provide a score for nearly the entire adult U.S. population.
For many individuals, this concept will seem far-fetched. Consider trying to understand the opening sentence of a news release from TransUnion and Spring Labs from, say, 2015: “Spring Labs is putting TransUnion’s identity and credit data on-chain via the ky0x Digital Passport to help speed Web3 and DeFi adoption.”
Quotes
“We want to foster greater trust in DeFi products and services, so we created the tool suite that makes available off-chain reputation data on public blockchain that preserves the user’s privacy and anonymity. With TransUnion’s identity and credit data, we’re providing the first building block to bringing reputation on-chain, in turn helping create a more efficient DeFi lending environment that can offer better loans, more available liquidity, and ultimately accelerate adoption in the space.” – John Sun, CEO of Spring Labs.
“We believe in the growth potential of DeFi. Providing credit and identity data on-chain is a huge step towards improving the financial products available in the space. Working with Spring’s ky0x, we now have a solution for users to control and share their data on blockchain in a privacy-preserving way, enabling them to safely interact with a broader set of financial products.” – Steve Chaouki, President of U.S. Markets and Consumer Interactive at TransUnion.
“Enabling access to an industry-standard, trusted credit risk score like VantageScore on-chain and in a consumer permissioned, anonymous way opens the door to greater growth and financial inclusion in the DeFi space. Paired with ky0x’s AML and KYC capabilities, DeFi lenders can transact with confidence at lower rates, potentially paving the way for lending without the over-collateralization that is standard today.” – Liz Pagel, SVP Consumer Lending Business Leader at TransUnion.
