30000 uncollateralized crypto loans issued via iris scans to expand financial access

A San Francisco-based fintech startup, Divine Research, has issued over 30,000 uncollateralized crypto loans—primarily under $1,000 in USDC—to borrowers in underserved regions since late 2024. The platform leverages biometric verification through World ID, an iris-scanning technology developed by OpenAI co-founder Sam Altman, to authenticate borrowers as unique individuals. This approach minimizes identity fraud and repeat defaults, enabling a lending model that bypasses traditional banking infrastructure [1].

The loans target non-traditional demographics, including vendors, teachers, and gig workers, who often lack access to conventional credit. Founder Diego Estevez disclosed that interest rates range between 20% and 30%, with Divine absorbing a 40% default rate on first-time loans. To mitigate losses, borrowers receive reclaimable Worldcoin tokens, a mechanism that aligns with the platform’s broader integration of decentralized finance (DeFi) tools [1]. Unlike traditional lenders, Divine’s capital is sourced from everyday users seeking high-yield opportunities, creating a peer-to-peer structure that Estevez claims ensures consistent returns for lenders even in high-risk environments [1].

The uncollateralized lending niche is evolving rapidly. Ethereum-based startup 3Jane, backed by Paradigm, automates lending decisions with AI and routes defaulted loans to collectors. Meanwhile, firms like Wildcat cater to institutional borrowers by offering undercollateralized loans with flexible terms. These innovations reflect a shift toward reducing reliance on traditional banks, which have historically excluded marginalized populations [1].

Despite these advancements, the sector faces skepticism. The 2022 collapse of lenders like Celsius and Genesis—marked by criminal convictions and systemic failures—casts a long shadow over uncollateralized models. Divine and similar platforms must balance innovation with robust risk management as traditional institutions, including JPMorgan, explore crypto-backed lending. For now, Divine’s approach highlights the potential of biometric verification and DeFi to expand financial access, though scalability and regulatory clarity remain critical hurdles [1].

Source: [1] No Bank, No Problem: 30,000 Crypto Loans Issued with Just an Eye Scan [https://coindoo.com/no-bank-no-problem-30000-crypto-loans-issued-with-just-an-eye-scan/](https://coindoo.com/no-bank-no-problem-30000-crypto-loans-issued-with-just-an-eye-scan/)