Yigit Taha OZTURK 
The world of cryptocurrency continues to evolve, with innovative solutions emerging to address the gaps left by traditional financial systems. Divine Research, a San Francisco-based lender, has begun issuing unbacked USDC loans using Sam Altman’s World ID, an iris-scanning platform for borrower verification. This development marks a significant step in crypto lending, particularly targeting underserved individuals across the globe.
Unbacked Crypto Loans Powered by World ID
Since December, Divine Research has issued approximately 30,000 short-term crypto loans, primarily under $1,000. These loans are made in USDC, a stablecoin, and the company uses World ID to ensure that borrowers cannot create multiple accounts after defaulting on loans. This provides a safer lending process, especially for overseas customers who are often underserved by traditional financial institutions.
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Diego Estevez, founder of Divine, told the Financial Times, “We’re loaning to regular folks like high-school teachers, fruit vendors, essentially anyone with internet access.” Estevez added that the interest rates, ranging from 20% to 30%, are necessary to offset the risk of default, which has been reported to be around 40%.
Opportunities for Everyday Investors in Crypto Lending
The growing platform allows everyday investors to participate in high-risk crypto loans. Estevez pointed out that, “Anyone can provide liquidity. We’ve engineered the system such that after accounting for default rates and interest rates, providers will always make a profit.” This presents a new avenue for regular investors to engage in the crypto economy.
As Divine Research and other crypto lenders like 3Jane capitalize on market momentum, the landscape for unbacked loans continues to evolve. 3Jane, for instance, raises funds based on asset verification but still does not require collateral. The platform plans to use AI agents to automatically follow lending rules and reduce rates.
Crypto Lending Is Gaining Traction
Despite its current small market share, crypto lending continues to gain attention, especially with institutional players reentering the space. Recently, JPMorgan began exploring Bitcoin-backed loans, signaling a growing acceptance of digital asset-backed credit. However, the collapse of major platforms like Celsius and Genesis in 2022 remains a cautionary tale for the industry.
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