{"id":431946,"date":"2022-04-15T06:31:01","date_gmt":"2022-04-15T03:31:01","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/reputation-dao-would-you-give-up-privacy-for-unsecured-loans-in-defi\/"},"modified":"2022-04-15T06:31:01","modified_gmt":"2022-04-15T03:31:01","slug":"reputation-dao-would-you-give-up-privacy-for-unsecured-loans-in-defi","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/reputation-dao-would-you-give-up-privacy-for-unsecured-loans-in-defi\/","title":{"rendered":"# Reputation DAO: Would you give up privacy for unsecured loans in DeFi?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a407ea51602b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a407ea51602b\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/reputation-dao-would-you-give-up-privacy-for-unsecured-loans-in-defi\/#%E2%80%9D_Reputation_DAO_Would_you_give_up_privacy_for_unsecured_loans_in_DeFi_%E2%80%9C\" >&#8221; Reputation DAO: Would you give up privacy for unsecured loans in DeFi? &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Reputation_DAO_Would_you_give_up_privacy_for_unsecured_loans_in_DeFi_%E2%80%9C\"><\/span>&#8221; Reputation DAO: Would you give up privacy for unsecured loans in DeFi? &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDQvNWMwY2VmOTItNTA4Yi00ZGMyLWEwYWEtNTgxMzQ0ODc0MTMwLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-2a0745c6>An ambitious new decentralized autonomous organization (DAO) has built a data service for lending platforms that records a user\u2019s financial reputation to reduce the amount of collateral needed for a loan.<\/p>\n<p>It has partnered with Chainlink and that protocol\u2019s founder Sergey Nazarov is an early backer.<\/p>\n<p>Users of Reputation DAO will have traditional financial data such as anti-money laundering and know-your-customer (AML\/KYC), credit scores and banking data tied to their account. The data is designed to help ease friction in obtaining a loan from a decentralized platform, but raises questions about security and the principles of zero-knowledge lending.<\/p>\n<p>The Reputation DAO team told Cointelegraph its connection with those traditional financial authorities is \u201ccritically important to remove some of the trust barriers related to under-collateralized lending.\u201d<\/p>\n<p>Decentralized finance (DeFi) protocols such as AAVE (AAVE) and Maker (MKR) require users to put down at least 150% the value of the loan they wish to take out. This overcollateralization protects the protocols from insolvency in the case of liquidations due to volatility since the loans are made through zero knowledge smart contracts. <\/p>\n<p>While the Reputation DAO team said \u201cretail consumers are getting more comfortable with algorithmic loans,\u201d it also pointed out that \u201cinstitutional interest is growing at a rapid rate.\u201d<\/p>\n<p>That institutional interest is clearly demonstrated by the $222 million of seed and strategic funds invested in DeFi protocols since March 15 according to crypto fundraising tracker <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/airtable.com\/shrC25XXUcsShs6f1\/tbllShMbhc5jooPRb\">Airtable<\/a>. Reputation DAO is one of those protocols and closed a $4.7 million seed round on April 13 led by Chainlink co-founder Sergey Nazarov and AirTree Ventures.<\/p>\n<p>But for many DeFi users, tying sensitive financial data to a blockchain based lending platform raises security and privacy concerns. Some users may be more comfortable putting down higher collateral on a DeFi loan if the protocols do not have access to their information, thereby keeping their identity confidential. <\/p>\n<p>Reputation DAO assured Cointelegraph that its partnership with the industry leading information oracle Chainlink, which uses the privacy-preserving protocol DECO, helps keep its users\u2019 data secure. <\/p>\n<p>Cointelegraph reached out to an active and successful DeFi investor who asked to go by the name \u201cUnseo\u201d for his thoughts. He said that he would be wary of using Reputation DAO to help get a loan. He argued that such a service \u201cwould make the DeFi system more fragile,&#8221; and that\u00a0 \u201cI&#8217;d be trusting the judges of other participants\u2019 creditworthiness instead of going off math.\u201d <\/p>\n<blockquote><p>\u201cEven though I have good credit, I&#8217;d rather not use a more fragile system for the convenience of having a better utilization allowance.\u201d<\/p><\/blockquote>\n<p><strong><em>Related: <\/em><\/strong><strong><em>First steps: Basic tips for getting started investing in DeFi<\/em><\/strong><\/p>\n<p>Time will tell how DeFi users will react to Reputation DAO\u2019s value proposal. <\/p>\n<p><template data-name=\"subscription_form\" data-type=\"defi_newsletter\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/reputation-dao-would-you-give-up-privacy-for-unsecured-loans-in-defi\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Reputation DAO: Would you give up privacy for unsecured loans in DeFi? &#8220; An ambitious new decentralized autonomous organization (DAO) has built a data service for lending platforms that records a user\u2019s financial reputation to reduce the amount of collateral needed for a loan. It has partnered with Chainlink and that protocol\u2019s founder Sergey&#8230;<\/p>\n","protected":false},"author":1,"featured_media":431947,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDQvNWMwY2VmOTItNTA4Yi00ZGMyLWEwYWEtNTgxMzQ0ODc0MTMwLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74868,75141,77595,117],"class_list":["post-431946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-defi","tag-kyc","tag-lending","tag-business"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/431946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=431946"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/431946\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/431947"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=431946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=431946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=431946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}