2.2.2 How Credit Ratings are Computed

CreDA credit scores are computed based on analysis and modeling of users' behavior and on-chain usage characteristics (off-chain to be incorporated in 2022). When users bind their DID the modeling process begins automatically. Any on-chain behavior by users may have an impact on their credit rating, factors that affect the credit rating include (but are not limited to):

• User assets: Asset holdings across all blockchains are bound under your DID, the length of time you have owned these assets, and the size of your assets on the blockchain, all affect your credit score.

• Activity: the activity of bound wallets, transactions under your DID, participation across DeFi projects, funds involved in on-chain transaction, trading networks and on-chain metaverse social network activity under your DID. This data represents whether you are an active on-chain user and your trading preferences.

• On-chain behavior: your participation in DeFi programs affect your credit rating, including participation in lending programs, such as lending platforms included in CreDA e.g. Compound, Curve, and Aave.

• Loan Participation: your credit score is often affected by the amount of time you participated in loan programs, whether you are liquidated or not, the value of the collateral, and whether you actively repay the loan during periods of high market volatility.

The CreDA Credit Oracle will generate relative credit ratings for users that range from zero to one thousand (0 - 1,000).

The final credit rating value presented by the modeling process is a relative score based on the evaluation of an individual user's past behaviors, Metaverse Credit Network (cNetwork) and real time credit rating.