#OnChainLendingSurge Onchain credit scores were a missing piece in the un/under-collateralized crypto lending ecosystem. Without collateral, lenders must have ways to assess the likelihood of loan repayment. Lender preferences would probably include a creditworthiness score and loan repayment history.

In addition, there need to be consequences for skipping out on an under-collateralized loan in bad faith. With a typical TradFi mortgage, not making your house payments results in the loss of your down payment — and having the lending institution repossess your house.

Without consequential crypto loan repercussions, the dishonest side of human character is tempted to borrow capital — and never pay it back to the gullible/unfortunate crypto lender. Onchain credit scores are a key tool in the DeFi lending toolbox.