Divine Research Issues Unbacked Crypto Loans Using Sam Altman’s World ID

Divine Research has introduced a novel lending model in the decentralized finance (DeFi) sector by offering $30,000 unbacked crypto loans secured through Sam Altman’s World ID, a decentralized identity verification protocol. This initiative eliminates traditional collateral requirements, relying instead on a synthetic identity verification system to assess borrower eligibility. By leveraging blockchain-based identity metrics, the platform aims to democratize access to capital for users, particularly those in underserved regions lacking traditional financial infrastructure [1]. The loans are structured to streamline the lending process while enhancing privacy, as World ID’s non-custodial framework ensures sensitive data remains encrypted and not stored centrally [1].

The integration of World ID represents a significant shift in crypto lending practices. Unlike conventional models that require asset collateralization, Divine Research’s approach assesses risk through identity verification metrics, which determine loan terms and interest rates. This method reduces friction for borrowers seeking liquidity but introduces challenges related to default risk, as the absence of physical collateral could incentivize riskier lending behaviors. Critics highlight the opacity of identity-based creditworthiness criteria, which may limit transparency for users [1].

The collaboration with Altman, co-founder of OpenAI and Worldcoin, underscores the convergence of AI-driven identity verification and DeFi. Worldcoin, the protocol underpinning World ID, has faced scrutiny over biometric data collection but asserts that user data is not stored centrally. Divine Research’s initiative positions itself at the intersection of these technologies, potentially expanding access to credit for individuals without traditional financial histories. However, the success of the program hinges on the reliability of identity-based risk models, which must accurately predict repayment behavior to mitigate systemic risks [1].

Industry analysts note that the broader DeFi landscape is evolving toward user-centric financial tools. Recent regulatory shifts in the U.S. have spurred stablecoin growth, with total supply increasing by $4 billion earlier this year, reflecting heightened demand for flexible lending solutions [1]. Divine Research’s unbacked loans could further accelerate this trend by enabling crypto users to access liquidity without selling assets. Yet, the lack of collateral raises concerns about large-scale defaults, necessitating adaptive risk models and additional safeguards to ensure platform stability.

The launch also highlights the growing role of identity protocols in blockchain infrastructure. As of July 25, 2025, USDC’s market capitalization stood at $16.78 billion, illustrating the potential scale of crypto assets influenced by such innovations. While the immediate market impact of these loans remains uncertain, the use case demonstrates how identity verification is transitioning from authentication to a core financial function. The initiative’s long-term viability will depend on its ability to balance accessibility with risk management, setting precedents for future DeFi developments [1].

Source: [1] [title: Divine Research issues unbacked crypto loans using Sam Altman’s World ID] [url: https://www.coingecko.com/en/coins/joe-2]

[1] [title: Divine Research Rolls Out Unbacked Crypto Loans with Sam Altman’s World ID] [url: https://coinmarketcap.com/community/articles/688615e847b6646c8de9dbea/]