The founder of Creditcoin, Tae-Lim Oh, recently held an AMA with Decentralized club. For those of you who missed it, we've selected some highlights for you to read, with the full AMA transcript, including community questions, available at the end.


Highlights

What innovative solution is Creditcoin bringing to topple its competitors with similar offerings in the financial markets?

Creditcoin focuses on non-collateralized lending, where most DeFi protocols like Compound or Aave are built for crypto-collateral loans. The difference is due to differences in target users. While Creditcoin is built for unbanked and underbanked borrowers who are not necessarily using crypto today, most DeFi protocols are built for crypto-natives.
Fundamentally speaking, collateralized lending isn’t suitable for the vast majority of real-world lending cases where borrowers are already capital constrained.

What major news should we still look forward to from Creditcoin by the end of the year?

Credal (Infura for Creditcoin).
User adoption (targeting 5M by EoY).
Listing on more exchanges.
Ecosystem expansion by integrating with other networks.

In the event the borrower is unable to fulfill his/her repayment obligation how does Creditcoin insure the lender against total loss of funds? Is the credit market physically regulated by financial bodies?

Important question. The network itself cannot collect loans. However, lenders can make an off-chain agreement with the borrower that enables them to physically and legally collect loans. For instance, a fundraiser who is a regulated financial institution can provide that information off-chain to prove its creditworthiness and legal terms. With that in mind, the lender will assess both on-chain and off-chain information about the fundraiser to make the investment decision.

Can anyone from anywhere in the world get loans in your platform? Or do you plan to expand in the future? What all items do you take in as collateral? Are digital assets also considered as collateral? Do the users need to hold $CTC to get full access to your platform?

We are currently working with partners in Africa and ASEAN region. We plan to expand within those two regions and to LATAM in the foreseeable future.
The end-users do not need to hold $CTC if they are not directly interacting with the Creditcoin Network. In most cases, we expect the platform providers to spend $CTC on behalf of their users.
The Creditcoin Network is solely for credit loans and does not support collateral. We won’t add the concept of collateral unless we see a meaningful reason to do so.

I like the mission of CREDIT platform to create a place with borderless loan opportunities. But how do you find valid and loan deserving institutions or individuals? Do you have any field workers for this purpose?

We can use off-chain reputation and due diligence. Note that we don't need everything to happen on-chain. Just like exchanges have on-ramps, we have lenders with real world reputation who can make credit assessments and decisions, using their successful investment history to raise capital on the Creditcoin Network and build start own credit profile.

Does your project have any cross-chain plans in the future?

Creditcoin is was designed to be cross-chain since day 1. Today, it can record Bitcoin loans, Ethereum loans and ERC20 loans. You can also build new plugins to support any open blockchain and its tokens.

My attention is drawn to the creation of credit markets in Creditcoin. Can these markets be created by the users themselves for their economic functionality? Are strict requirements needed to have access to them?

Creditcoin is an open, permissionless blockchain and you do not need anyone's approval to make transactions on it. We are working with various parties to jump-start the ecosystem, but in the long run, we expect the credit market to run by itself.

Are there any incentives available to users of Creditcoin?

While there isn’t a built-in incentive for Creditcoin holders, we foresee various developments to utilize the asset.
We currently see two different possibilities: 1) $CTC Lending and 2) Governance Token.
1) $CTC Lending
Instead of buying $CTC to use it, you can borrow $CTC. For holders of $CTC, this will be a way to utilize their idle $CTC funds to generate capital.
2) Governance Token
We can use $CTC as a governance token of smart contracts within the Creditcoin ecosystem. Given an upgradeable smart contract, we can make token holders vote to approve or disapprove a proposed upgrade.
The governance token can have an incentive program similar to others like $COMP.

Full Transcript

Decentralized Club Questions

Q1. What is Creditcoin about and what idea was it created out of?

Creditcoin is about allowing anyone to build an objective, verifiable credit profile.
Everyone deserves credit, banked or unbanked. However, unbanked or underbanked people cannot borrow from financial institutions and build their credit profiles in the current system.
With Creditcoin, anyone can keep track of their credit history, verifiable by a 3rd party. For investors, this means opening up a new market which they could not assess due to lack of information.

Q2. What innovative solution is Creditcoin bringing to topple its competitors with similar offerings in the financial market?

Creditcoin focuses on non-collateralized lending, where most DeFi protocols like Compound or Aave are built for crypto-collateral loans. The difference is due to differences in target users. While Creditcoin is built for unbanked and underbanked borrowers who are not necessarily using crypto today, most DeFi protocols are built for crypto-natives.
Fundamentally speaking, collateralised lending isn’t suitable for the vast majority of real-world lending cases where borrowers are already capital constrained.

Q3. How can global users or investors use Creditcoin to fundraise?

As a fundraiser, you can start by registering your offer on the Creditcoin Network: how much you want to borrow, in what currency, for how long, and what interest you are offering to pay.
Note that merely posting your offering does not guarantee receiving loans. Investors need to buy into your offer.

Q4. Could you briefly talk about $CTC and the utilities?

You can use the Creditcoin Network to post your offer to borrow or lend, get matched, and make/take the loan investment. When the loan matures, the borrower can repay the lender and register the repayment.
Within this loan cycle, each user spends $CTC to make transactions on the Creditcoin Network. Note that you only pay the transaction fee when making a “write transaction,” adding more data on the network. Reading from the network is free. Also, the transaction fee is locked for a year and returned to the sender—a notable difference from other transaction fee models.

Q5. Are there any incentives available to users of Creditcoin?

While there isn’t a built-in incentive for Creditcoin holders, we foresee various developments to utilize the asset.
We currently see two different possibilities: 1) $CTC Lending and 2) Governance Token.

1) $CTC Lending

Instead of buying $CTC to use it, you can borrow $CTC. For holders of $CTC, this will be a way to utilize their idle $CTC funds to generate capital.

2) Governance Token

We can use $CTC as a governance token of smart contracts within the Creditcoin ecosystem. Given an upgradeable smart contract, we can make token holders vote to approve or disapprove a proposed upgrade.
The governance token can have an incentive program similar to others like $COMP.

Q6. What major news should we still look forward to from Creditcoin by the end of the year?

Credal (Infura for Creditcoin)
User adoption (targeting 5M by EoY)
Listing on more exchanges
Ecosystem expansion by integrating with other networks

Q7. What's your current user adoption strength?

We currently have 2M users, powered by our fintech lending partners. We were able to acquire users by growing with strong partners in the emerging markets. Our partners raise through Creditcoin, which offers better terms than financial institutions, and the savings are passed on to their borrowers, creating a virtuous cycle.

Twitter Questions

Q1.  If the event the borrower is unable to fulfill his/her repayment obligation how does Creditcoin insure the lender against total loss of funds? Is the credit market physically regulated by financial bodies?

Important question. The network itself cannot collect loans. However, lenders can make an off-chain agreement with the borrower that enables them to physically and legally collect loans. For instance, a fundraiser who is a regulated financial institution can provide that information off-chain to prove its creditworthiness and legal terms. With that in mind, the lender will assess both on-chain and off-chain information about the fundraiser to make the investment decision.

Is there any form of KYC requirement on Creditcoin?

None. It is a permissionless/public blockchain.

Q2. Why do you think it is important to create an inter blockchain lending market?

A maximalist may disagree, but like people use thousands of different web platforms today, we believe people will use multiple blockchains in the future. There is no reason to lock us down with one.

Q3. Can anyone from anywhere in the world get loans in your platform? Or do you plan to expand in the future? What all items do you take in as collateral? Are digital assets also considered as collateral? Do the users need to hold $CTC to get full access to your platform?

We are currently working with partners in Africa and ASEAN region. We plan to expand within those two regions and to LATAM in the foreseeable future.
The end-users do not need to hold $CTC if they are not directly interacting with the Creditcoin Network. In most cases, we expect the platform providers to spend $CTC on behalf of their users.
The Creditcoin Network is solely for credit loans and does not support collateral. We won’t add the concept of collateral unless we see a meaningful reason to do so.

Website Questions

Q1. Destination transactions or retrieval of transaction data to / from Creditcoin Blockchain will use Credal: the Creditcoin API. What is Credal? How does Credal work? What advantages does it offer?

Credal is an API for Creditcoin. Like what Infura does for Ethereum, Credal allows developers to interact with Creditcoin without running and maintaining their own Creditcoin nodes. Developers can simply make REST API requests to Credal instead.
Behind the scenes, the Credal server is connected to multiple Creditcoin nodes, communicating with them on behalf of the developer, according to the API requests.
It will save a lot of time for developers and allow them to focus on their business logic instead.

Q2. Marketing is a central element for every project, so that everyone knows the potential that a project can bring is vital to achieve the goals set. What is your strategy to attract new users and Investor to Your platform and keep them long term?

Initially, borrowers will get attracted by loans with better terms and liquidity. The project already has several lenders working with it, giving the network access to millions of users.
Investors are more likely to get attracted by the high, fixed APY that they cannot get elsewhere. Gluwa Capital (an investment fund) already has successfully raised two tranches for their Bond Account, providing 12% APY for 3 months lock-up, each capped at $500k and filled almost instantly.
In the long term, lenders will build their credit, by successfully raising and returning to the investors. The credit rating of lenders will attract even more investors.

Q3. What is Gluwa's relationship with CreditCoin?

Gluwa is the first technology provider of Creditcoin. It has implemented the first version of the blockchain and is continuing to improve it.
Gluwa hopes more people to join the development of Creditcoin! As a member of Gluwa or as an independent contributor. If you are interested, please contact us via Github.
https://github.com/gluwa/Creditcoin

Telegram questions

Q1. I understand that the investor will evaluate the risk of the opportunity based on the credit history of the servicer, but you yourselves say that many people lack a credit history because they are not given the opportunity to access a reliable credit system, so can a person ask for a loan if he/she does not have a credit history? Is this a fundamental requirement?

Anyone can ask for a loan without a credit history. Lack of history will make the investment riskier, so it means you are likely to get a worse deal than when you have built a credit.

Q2. I like the mission of CREDIT platform to create a place with borderless loan opportunities. But how do you find valid and loan deserving institutions or individuals? Do you have any field workers for this purpose?

We can use off-chain reputation and due dilligence. Note that we don't need everything to happen on-chain. Just like exchanges have on-ramps, we have lenders with real world reputation who can make credit assessments and decisions, using their sucessful investment history to raise capital on the Creditcoin Network and build start own credit profile.

Q3. Does your project have any cross-chain plans in the future?

Creditcoin is was designed to be cross-chain since day 1. Today, it can record Bitcoin loans, Ethereum loans and ERC20 loans. You can also build new plugins to support any open blockchain and its tokens.

Q4. Can you please talk about your partnership with Aella? What other platform or project in Africa are you in partnership with?

Aella has initiated the Creditcoin project alongside with Gluwa. You can think of them as the supplier of the project. Through Aella and their regional expertise, we are connected with various players in Africa, including financial institutions (e.g., banks, payment processor, and insurance provider), telcos, SaaS and more.

Q5. My attention is drawn to the creation of credit markets in Creditcoin. Can these markets be created by the users themselves for their economic functionality? Are strict requirements needed to have access to them?

Creditcoin is an open, permissionless blockchain and you do not need anyone's approval to make transactions on it. We are working with various parties to jumpstart the ecosystem, but in the long run, we expect the credit market to run by itself.