US-based lending institution Divine Research provides uncollateralized crypto loans to underserved borrowers using World ID.

Divine Research, a US lending institution, has extended over 30,000 unsecured cryptocurrency loans since December, primarily to overseas borrowers who are underserved by traditional financial services. The company uses World ID, an iris scanning platform, to verify borrowers' identities and prevent multiple account openings in case of default. Borrowers include ordinary individuals such as high school teachers and fruit vendors.

San Francisco-based lender Divine Research has issued over 30,000 unsecured cryptocurrency loans since December, primarily targeting overseas borrowers underserved by traditional financial services. The company uses World ID, an iris scanning platform developed by Sam Altman, to verify borrowers' identities and prevent multiple account openings in case of default. Borrowers include ordinary individuals such as high school teachers and fruit vendors.

Divine Research offers loans under $1,000 in the USDC stablecoin. Interest rates range from 20% to 30%, reflecting the high-risk profile of the target demographic [1]. Despite a reported 40% default rate by July 2025, the platform emphasizes its mission to expand financial access, contrasting traditional lending practices that often exclude low-income or unbanked individuals [2].

World ID's role extends beyond verification, reshaping the risk landscape of crypto lending. By prioritizing accessibility over stringent risk mitigation, Divine Research challenges established financial norms while introducing scalable solutions for identity verification. The firm's model aligns with broader DeFi trends to embed identity tools into lending platforms. However, the reported default rate underscores the need for mechanisms to balance inclusivity with fiscal responsibility as the sector evolves [3].

The initiative's impact remains largely financial, with interest structures designed to offset default risks. High-interest rates (exceeding 40%) ensure profitability despite losses, positioning the model as a potential precedent for future decentralized identity solutions. Sam Altman’s technology introduces a novel standard for identity verification, demonstrating its viability in securing crypto loans. This innovation could influence regulatory frameworks, though responses remain minimal as the market tests its long-term efficacy [4].

Divine Research is part of a growing group of high-risk crypto lenders capitalizing on renewed market momentum and political tailwinds. Another startup, 3Jane, recently raised $5.2 million from Paradigm and offers uncollateralized credit lines on Ethereum. Unlike Divine, 3Jane requires "verifiable proofs" of assets or income, but still no collateral. 3Jane plans to introduce AI agents that follow lending rules automatically, aiming to lower rates while enforcing repayment [5].

Crypto lending gains traction as institutional players reenter the space. Last week, reports revealed that JPMorgan Chase is looking into crypto-backed loans, planning to lend directly against crypto assets like Bitcoin (BTC) and Ether (ETH). However, the shadow of 2022 looms large, when major crypto lenders like Celsius and Genesis collapsed [6].

References:
[1] https://www.ainvest.com/news/divine-research-issues-30000-unbacked-crypto-loans-world-id-40-default-rate-20-30-interest-2507/
[2] https://www.panewslab.com/en/articles/7jiy6k7y
[3] https://www.ainvest.com/news/divine-research-issues-30000-unbacked-crypto-loans-world-id-40-default-rate-20-30-interest-2507/
[4] https://www.tradingview.com/news/cointelegraph:336c27280094b:0-divine-research-issues-unbacked-crypto-loans-using-sam-altman-s-world-id/
[5] https://cointelegraph.com/news/divine-research-issues-30000-unbacked-crypto-loans-world-id?utm_campaign=rss_partner_inbound&utm_medium=rss&utm_source=rss_feed