CreDA Protocol Whitepaper

1.1 Definition

“Turn data into wealth”

CreDA (Credit Data Alliance) is the world's first decentralized credit rating service.

The CreDA protocol utilizes real world (off-chain) and blockchain (on-chain) data to compute a user credit score, also known as a credit rating. CreDA provides on-chain credit ratings for the blockchain world by minting a user’s credit profile into a non-fungible token (cNFT). The cNFT enables the user to unlock preferential rates and incentives across a variety of use cases e.g. reduced borrowing rates on decentralized finance (DeFi) platforms.

The CreDA protocol enables DeFi platforms to model risk profiles across their userbase to offer personalized rates and services, making them more competitive versus industry peers.

Built on Ethereum Layer 2,the CreDA Oracle uses AI to leverage blockchain’s transparency and immutability by assessing activity across multiple chains including Ethereum, Arbitrum, BSC (Binance Smart Chain), Fantom, Polygon, HECO (Huobi ECO Chain), and OEC. The CreDA credit rating system is based on the decentralized identifier (DID) protocol, utilizing artificial intelligence (AI) to compute user credit scores through its proprietary CreDA Credit Oracle.

CreDA introduces the concept of personal credit scores into the DeFi ecosystem analogous to real world (off-chain) providers such as FICO, Experian, Equifax, TransUnion and Zhima. CreDA provides a low-cost, trustless solution for DeFi platforms and end users through a decentralized credit rating system. The platform provides personalized lending schemas for individual users according to their individual credit rating.

Through participation in the CreDA protocol and virtuous on-chain activity, users can benefit from preferential margin rates, improved credit ratings, and a range of incentives based on their credit score.

CreDA enables users to increase their leverage ratio (loan vs. collateral) to the extent some users may be able to secure loans with no over-collateralization being required. CreDA allows users to build and grow their individual credit whilst contributing to the evolution of a DeFi web of trust across multiple chains. This credit can be extended into traditional finance where off-chain commercial entities can account for on-chain activity through the consumer’s CreDA score.