Onboarding X-Margin’s credit evaluation will provide more information on borrowers without revealing sensitive data.
X-Margin, a credit oracle risk engine for trading firms and institutions, has been selected by DeFi lending protocol Atlendis to enable capital-efficient crypto borrowing and lending.
Atlendis enables crypto loans without collateral and by using X-Margin’s methodologies to reduce the inherent risk of DeFi it will be able to accelerate the adoption of uncollateralized loans on the blockchain.
The rules in overcollateralized lending include a borrower accessing an amount of secured credit only if they front at least the same amount in collateral. This limits borrowers in their borrowing capacity and lenders in their potential return.
Uncollateralized lending can provide significantly higher returns, but a lack of transparency on a borrower’s profile and creditworthiness may create a barrier for lenders to make an informed decision.
Potential credit risks can discourage lenders from depositing into liquidity pools, reducing a borrower’s borrowing capacity.
Enter the Atlendis protocol, which addresses these issues together with X-Margin,which enables the measurement of institutional borrower creditworthiness by computing a credit risk evaluation without revealing the sensitive underlying data.
Straddling CeFi as well as DeFi applications with a credit oracle for counterparty credit evaluation, X-Margin encompasses real-time risk monitoring across borrower portfolios, KYC and financial statement analysis. This means transparency of risk through X-Margin’s privacy-preserving credit oracle.
The process includes borrowers obtaining a credit evaluation from X-Margin, which will be displayed on the Atlendis protocol. Once borrowers are whitelisted, they will get access to borrower-specific liquidity pools providing a revolving line of credit at a borrowing rate established via market rate discovery. Lenders will have the ability to choose the borrowers they trust to lend to as well as their preferred lending rate.
Alexis Masseron, Co-Founder and CEO of Atlendis Labs, said: “While the Atlendis protocol focuses on the financial aspect of the platform to make it fair and fully functional, it cannot vouch for the reputation of the borrowers involved. We are excited to partner with X-Margin, as onboarding X-Margin’s credit evaluation will provide more information on borrowers without revealing sensitive data, and thus attract lenders with verification that loans will be more secure.”
Darshan Vaidya, CEO of X-Margin, said: “On-chain credit markets will be one of the fastest-growing sectors of DeFi, and the backbone of this will depend on an oracle-driven approach that can capture the off-chain and on-chain activity of a borrower in a privacy-preserving way. We are delighted to be working with the Atlendis Labs team to help build a more efficient credit marketplace for the crypto ecosystem.”