At the heart of it is Divine Research, a San Francisco-based startup that has issued tens of thousands of uncollateralized loans—mostly under $1,000—in USDC to borrowers across underserved regions since late 2024.

What makes Divine unique is its reliance on biometric verification. Using World ID, the iris-scanning tech from OpenAI’s Sam Altman, the platform ensures each borrower is a unique individual, effectively blocking repeat defaults under fake identities.

“We’re lending to ordinary people—vendors, teachers, gig workers,” said founder Diego Estevez. With interest rates ranging from 20% to 30%, Divine absorbs a roughly 40% default rate on first loans. Part of the loss is offset by reclaimable Worldcoin tokens granted to borrowers.

Unlike banks, Divine’s capital comes from everyday users chasing high-yield opportunities. Estevez claims the structure ensures consistent profits for lenders, even in high-risk conditions.

Elsewhere in the fast-growing uncollateralized lending niche, Ethereum-based startup 3Jane is taking a slightly different approach. Backed by Paradigm, it verifies income and assets, but doesn’t require collateral either. The firm is building AI systems to automate lending decisions and route defaulted loans to debt collectors.

For institutional borrowers like market makers, firms such as Wildcat provide undercollateralized loans with flexible terms. In the event of default, lenders coordinate among themselves for recourse.

As crypto lending gains traction, even giants like JPMorgan are exploring options—reportedly preparing to offer loans backed by assets like Bitcoin and Ether.

Still, the shadow of 2022 looms large. The collapse of lenders like Celsius and Genesis—along with criminal convictions—remains a cautionary tale. Yet, firms like Divine see a path forward, blending decentralized finance with new digital ID tools to offer financial access where banks have long fallen short.

The post No Bank, No Problem: 30,000 Crypto Loans Issued with Just an Eye Scan appeared first on Coindoo.

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Filed under: Bitcoin - @ July 27, 2025 6:31 pm