[Would You Lend $1,000 to Your Online Friend?]

Society is formed based on the trust between its members. With the trust that others won't harm you, we live daily lives in peace. However, blockchain was designed to eliminate the need for the trust, with the motto "Don't trust, verify."

While this trade-off helped secure financial systems, it left an entire area of human interaction - under-collateralized trust-based credit - largely unexplored.

Today, we have a few under-collateralized/credit-based lending protocols these days - but they limit participants by requiring KYC, a license, or a legal entity (e.g., 3Jane, @wildcat).

These restrictions are adopted to avoid defaults, which is understandable since there have been many such cases (e.g., Maple Finance).

But it sounds very web3, huh? Remember the word "permissionlessness"?

On the other hand, another motto of blockchain is "Banking the unbanked", which is one of the reasons I became interested in web3. We are seeing a surge in demand for stablecoins in developing countries. If you haven’t heard of it, watch below by @unchainedcrypto

However, they still are lack of financial infrastructure. They have to go to the bank for hours just to get cash. They get robbed when they store physical cash in their house or shop because it's difficult to go to the bank. That's why they adopted e-money so quickly; they all have mobile phones.

These communities need better access to digital financial tools, yet they are excluded from the current models that rely on traditional credentials. Would they have a proper license or "legal entity" to get a crypto loan? They don't even have sufficient financial records with banks!

(Fun fact: There was a Korean crypto project that claimed to solve this issue with crypto. But now they are launching a satellite with a new coin lol)

On the other hand, another motto of blockchain is "Banking the unbanked", which is one of the reasons I became interested in web3. We are seeing a surge in demand for stablecoins in developing countries. If you haven’t heard of it, watch below by @unchainedcrypto 
https://www.youtube.com/watch?v=yII9c4239nk