“The move enables better-informed, privacy-preserving DeFi and Web3 applications (internet applications based on public blockchains), unlocking a new world of permissioned and reputation-based products and features,” the companies said in a news release.
The collaboration will let blockchain companies view personal credit data using Spring Labs’ ky0x Digital Passport. The companies say this will let consumers get better interest rates when borrowing from lenders that operate on public blockchains such as Ethereum.
“We want to foster greater trust in DeFi products and services, so we created the tool suite that makes available off-chain reputation (e.g. KYC/AML, credit) data on public blockchain that preserves the user’s privacy and anonymity,” Spring Labs CEO John Sun said.
“With TransUnion’s identity and credit data, we’re providing the first building block to bringing reputation on-chain, in turn helping create a more efficient DeFi lending environment that can offer better loans, more available liquidity, and ultimately accelerate adoption in the space,” he said.
Spring Labs said the ky0x Digital Passport also enables any Web3 application or smart contract to access off-chain identity and compliance information. The company says it has created a system that lets users control their data while preserving their privacy.
Users can opt in and give permission to have their credit information attached to their wallets, while never needing to give up their identity when affirming their reputation and credit history to DeFi services, the company said.
Read more: Credit Suisse Tests Financing Through eNote
The announcement comes one day after another piece of news from the intersection of blockchain and lending. Credit Suisse said on Tuesday (Jan. 11) it had worked with the FinTech FQX to provide financing to two Swiss manufacturing companies through an electronic promissory note, or eNote.
The eNote is a blockchain-based short-term debt instrument are based on “the globally proven, formerly paper-based ‘promissory notes,’” FQX said.