New decentralized finance products are being launched at an unprecedented rate this year, and the latest offering is a credit score-based lending platform from Wing Finance.
DeFi is all about transparency, so knowing who is borrowing crypto collateral is of paramount importance to lenders. In collaboration with Ontology, cross-chain DeFi credit protocol Wing Finance has announced a first in the DeFi space called the Inclusive Pool.
Using technology from OScore, the decentralized credit score system built on Ontology’s DeID, the new product gives users real-time, accurate insight into another DeFi user’s credit status and liability. The system was designed to increase transparency between lenders and borrowers within the DeFi ecosystem. The announcement added;
“With that in mind, we wanted to extend it to allow people to undercollateralize assets and maximize their borrowing capabilities, granted that they have an impeccable OScore of course.”
Greater DeFi Transparency
The Inclusive Pool functions by including a supply pool and a borrow pool in addition to an insurance pool. Lending collateral for the three pools comprises the top three stablecoins: USDT, USDC, and DAI.
There are several rules for lending and borrowing, such as a limit of $500,000 for the supply pool and a borrowing maximum of $1,000. One loan per day is allowed, and users need to collateralize a certain amount every time they loan out assets.
The loan-to-value (LTV) ratio, or collateral factor, depends on the user’s OScore, or DeFi credit rating. Those with higher scores will get access to better LTV ratios. Interest rates also vary depending on the user’s OScore.
As a further incentive, WING tokens will also be distributed to liquidity providers and borrowers in the Inclusive Pool. Suppliers will get 40% of the token allocation with the remaining 60% being divided equally to the borrow pool and insurance pool.
Wing Finance’s native WING token is trading down by 6.1% over the past 24 hours at $16.83 at the time of writing. Over the past week, it has surged an impressive 48% while the rest of the DeFi market has corrected in line with the overall crypto cool down.
As with most DeFi tokens, WING spiked to a monumental $180 in mid-September when the protocol was launched and has fallen back since.
Ontology’s ONT token is trading flat on the day at around $0.50 but has lost 17% over the past week or so. Like most altcoins of its age, it is still down over 90% from its all-time high in May 2018.