DeFi is here to stay, but what catalysts can propel us towards mass adoption?
I think one is by improving DeFi loans and increasing their accessibility to a wider audience. Enter Nomis protocol- a new kid on the block in the DeFi lending space.
At the moment, the vast majority of defi loans are overcollateralized. For example, if you had $10k ETH and locked it up on a defi lending protocol (AAVE, Maker, Compound), you could only get a 70-80% collateralised loan ($7-8k USDC).
This current model is necessary as the lending protocol knows nothing about you and must apply a blanket risk assessment on all borrowers. As you are locking up liquidity, this is also not a very capital efficient model.
Large upfront capital requirements also create a barrier for people in underdeveloped economies and smaller companies/ start-ups.
The current tradfi solution isn’t great either as applying for a mortgage/ large loan involves
Access to banking system
Good credit score
Long and tedious approvals process
The solution could be a combination of both. What if you could get a defi loan but based on your wallet history and a good credit score, you could get access to better rates and lower amounts of collateral?
Enter Nomis protocol. Their mission is to enable users with a positive on-chain credit score to take out crypto loans with less collateral. They also plan to be a defi lending aggregator that finds the best lending offers across many platforms.
Nomis works by pulling data about your wallet, feeding it into their algorithm and spitting out a ‘Nomis score’. This is essentially your defi credit score that you can then use to take out loans.
I had a go on their website to see my Nomis score on an ETH wallet. Pretty cool UI. Currently works for Aeternity, Binance, Celo, Cube, Ethereum, Evmos, Klaytn, Moonbeam, Polygon, and Ripple wallets.
https://nomis.cc
The idea is to predict a crypto borrower’s reliability on the basis of a wallet’s data and transaction history using an artificial intelligence model (built on hierarchy analysis and pairwise comparisons methods).
The parameters that feed into the algorithm include wallet age, time between transactions and others listed below…. Check out their whitepaper for a more in-depth look
https://artyshatilov.notion.site/Nomis-Protocol-e859b9e3bae6412fb99d6119a8d2e5a4…
Nomis also plans to be an open-source protocol that is also governed by a DAO. They also talk about launching a native token at some point in the future (Won’t be NUM as I checked on coingecko and this has already been taken by another project).
The project is currently in Beta phase and very much in its early days. However, the project is backed by some big players including AAVE, Solana, 1inch and Polygon.
Recently the team have also won 2nd in the @0xPolygon’s #BUIDLIT Summer 2022, competed in @celo_camp and also @THUBA_DAO‘s hackathon in October.
Nomis has a strong team with lots of experience including Fedor Cherepanov, Alex Barabash, @ArtyShatilov , Nickolay Chebotov and Vitalii Agapov.
Overall, Nomis is a very interesting project with huge potential in the growing defi lending space. Providing an efficient method of allowing risk adjusted loans will only serve to accelerate the mass adoption of defi and better the community. I'll be following closely.