Coinbase CEO: On-chain Reputation to Replace Traditional Credit Scores

On August 31, according to BeInCrypto, Coinbase CEO Brian Armstrong stated that on-chain reputation will become a new generation of credit scoring system, potentially replacing the FICO score that currently dominates 90% of top-tier lending decisions in the United States. In response to Base founder Jesse Pollak, Armstrong noted that public ledgers can already record repayment history, wallet age, and counterparty behavior, and any lender can access the same on-chain record.

Currently, Ethos Network has implemented a system where users endorse each other to score wallets, and the lending application Credifi, based on this scoring, can provide unsecured loans of up to $3,000 to wallets with a score of 1,800. However, since on-chain addresses are not tied to real identities and borrowers can create new wallets at any time, whether on-chain reputation can effectively price real risk still awaits verification through subsequent default rate data.

[TechFlow]