Divine Research Issues 30,000 USDC Loans via Iris Scan, 40% Default Mitigated by Crypto Tokens

Divine Research, a San Francisco-based fintech firm, has pioneered a novel lending model using World ID—an iris-scanning platform developed by OpenAI’s Sam Altman—to issue uncollateralized USDC stablecoin loans to underserved borrowers. Since December 2024, the company has distributed over 30,000 small-scale loans, primarily under $1,000, to individuals in regions with limited access to traditional banking services. The initiative leverages biometric verification to authenticate users, ensuring they cannot open multiple accounts to evade repayment. Founder Diego Estevez highlighted that borrowers include educators, vendors, and gig workers, emphasizing the platform’s focus on serving populations excluded from conventional credit systems [1].

The loans, which carry interest rates between 20% and 30%, are structured to mitigate default risks through Worldcoin tokens—a digital asset distributed to borrowers as part of repayment incentives. Estevez noted that Divine Research absorbs a roughly 40% default rate on first-time loans but offsets losses by integrating these tokens into its financial model. This approach allows the platform to maintain profitability despite high-risk borrower profiles [2]. Unlike traditional lenders, the firm sources capital directly from individual investors seeking high-yield returns, bypassing institutional intermediaries and operating a decentralized peer-to-peer lending framework [3].

The model aligns with emerging trends in uncollateralized crypto lending, where startups like Ethereum-based 3Jane use AI-driven underwriting, and platforms such as Wildcat offer flexible terms for institutional borrowers. Meanwhile, traditional institutions like JPMorgan are exploring crypto-backed alternatives, signaling growing institutional interest in the sector. However, regulatory uncertainties persist. Brazil, for instance, is considering measures requiring fintechs to report transaction values, potentially complicating operations for platforms like Divine Research that operate in legal gray areas [4].

Critics caution that Divine Research’s high default rate mirrors risks seen in failed crypto lenders like Celsius and Genesis, which collapsed due to poor risk management. Estevez acknowledged these concerns but argued the platform’s focus on small loans and biometric verification creates a more resilient framework. By prioritizing digital identity tools over collateral, Divine Research aims to address systemic gaps in financial inclusion, particularly for lower-income borrowers excluded by legacy banking systems [5].

The initiative reflects broader debates about the role of decentralized finance in expanding credit access. While the 40% default rate raises questions about long-term sustainability, the use of World ID and Worldcoin tokens introduces innovative mechanisms to deter fraud and incentivize repayment. As the sector evolves, Divine Research’s approach underscores the potential of merging emerging technologies with financial innovation to serve niche markets.

Sources:

[1] [Divine Research Launches 30,000 Unbacked USDC Loans](https://www.ainvest.com/news/divine-research-launches-30-000-unbacked-usdc-loans-world-id-40-default-rate-20-30-interest-underserved-borrowers-2507/)

[2] [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/)

[3] [Brazil to Consider Requiring FinTechs to Report Transaction Values](https://www.pymnts.com/news/regulation/2025/brazil-to-consider-requiring-fintechs-to-report-transaction-values/)

[4] [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/)

[5] [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/)