- Divine Research issues 30,000 unbacked loans, leveraging World ID tech.
- High-interest rates between 20–30% introduced for microfinance clients.
- Targets underserved borrowers excluded from traditional financial services.
Divine Research has issued 30,000 unbacked USDC loans since December 2024 using Sam Altman’s World ID for verification in San Francisco, focusing on underserved borrowers.
The move highlights innovative microfinance, despite a high default rate, and raises questions about decentralized identity’s role in financial inclusion.
Divine Research’s Unbacked USDC Loans Initiative
Divine Research has initiated a novel lending approach by issuing 30,000 unbacked USDC loans since December 2024. These loans are targeted at underserved borrowers across the globe, utilizing Sam Altman’s World ID for biometric verification.
The San Francisco-based lender employs decentralized identity to mitigate risk, offering loans typically under $1,000. The initiative, spearheaded by Divine Research’s founder Diego Estevez, introduces a high-interest microfinance model with rates of 20–30%.
Borrowers such as high-school teachers and fruit vendors who are excluded from traditional finance now have access to loans. Estevez noted, “We’re loaning to average folks like high-school teachers, fruit vendors . . . basically anyone with access to the internet can get access to our funds. This is microfinance on steroids.”
The innovation expands access to financial resources for those previously underserved, while lenders can achieve annualized returns despite the high default risk. USDC is the principal token used, ensuring consistent value transfer in the lending process.
While regulatory bodies have yet to comment, the adoption of World ID technology raises questions about privacy and verification standards. The biometric-based system prevents users from reapplying after default, exhibiting potential in identity fraud prevention.
Historically, unbacked loans in the crypto sector have led to high default rates. Divine Research’s dual focus on microfinance and decentralized technology could redefine credit access. The long-term impacts on financial inclusion and potential regulatory responses remain to be studied.
