Zoracles Journey from Credit Scores to Financial NFTs

By September 16, 2021Ethereum
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A credit score is a statistical value or number that helps the lending parties evaluate their customer’s creditworthiness based on their previous credit history and repayment. Zoracles developed an on-chain solution called Zora Score to calculate an Ethereum wallet’s creditworthiness based on factors including the age of wallet, DeFi activity and loan repayment.

Credit scores are common and necessary in traditional finance to extend credit and give loans. Zoracles built an API for Zora Score which would allow decentralized crypto lending platforms to not require collateral because of the accuracy of their algorithmic assessment. This was a first for cryptocurrency projects and protocols.

Zoracles product team will implement Zora Score into an NFT marketplace to serve as a buyer and seller reputation data point. Hacks are frequent within DeFi, and this metric will protect marketplace participants from engaging in transactions with individuals with poor DeFi reputations or associated with banned wallets.

Zora Score was very different than a typical credit rating agency’s scoring system. Consumers have the opportunity to increase their traditional credit score with ancillary products and services provided by companies such as Credit Karma and lending partners like banks.

In this era of financial uncertainty and rapid advancements, the pace of cryptocurrency protocol development is no different. Zoracles reached out to several large protocols that requested a showcase of their Zora Score before implementing it. The team then built an NFT Swap product to satisfy the demands of the larger lender protocols and found a lot of interest in the standalone product. The product has evolved to include not only NFT Swaps but data analytics to assign value to these NFTs.

Next Evolution: Unibond

In early May, Uniswap v3 introduced a concept called concentrated liquidity positions expressed as NFTs. In general, liquidity providers are tasked with giving a price range for their token pairs. These positions translate into NFTs due to the unique parameters underlying each asset.

Uniswap v3 NFTs is currently an underserved market, while art & collectibles NFTs have done over $2.3B in sales during 2021. Zoracles projects Unibond will help minimize the gap between financial NFTs with real utility and art & collectibles that do not generate revenue for their holders.

Zoracles plans to use as much data analytics as possible to help buyers and sellers define a price for their liquidity positions based on the percentage of time spent in range and other factors currently being considered by the team which includes historic APY. This would solve a major missing piece that other NFT marketplace listings of Uniswap NFT assets which do not provide any guidance on pricing this new asset class.

Zoracles team is building a minimalist interface that uses back-end oracle data feeds to aggregate their main proprietary pricing algorithm to find a fair price for sellers to trade their Uniswap v3 NFTs for Ethereum from prospective buyers. In turn, Zoracles believes their marketplace will own a niche within the NFT market that could grow to match art & collectible NFTs.

Zoracles community fully supports a fee redistribution, and ZoraDAO will have the ability to make a proposal for an alternative amount of fee redistribution pending a community vote. ZoraDAO is expected to roll out in Q4 with a more consumer-friendly UI. Right now proposals can be made but the incomplete UI forces users to Etherscan to submit a proposal. Once ZoraDAO is fully operational, Unibond protocol and marketplace smart contracts will be controlled by ZoraDao.

Zora Token Holders should be interested in a 1.75% fee to provide token holders with passive income. Initially, the fee distribution funds will be aggregated in a treasury account controlled by ZoraDAO. Upon voting on an exact amount, these fees will be immediately released.

Next Steps: Mainnet

Zoracles is expected to release UniBond v0.1 on mainnet by the end of Q3. This highly anticipated marketplace should bring more attention to financial NFTs. We can expect an opportunity to be announced in the coming weeks at the end of Q3. Visit the Zoracles community assets to know more about Zoracles and Unibond launch.

A marketplace dedicated to Uniswap V3 NFTs is the first and unique value proposition of Unibond. The platform redistributes fees to Zora token holders and is completely decentralized. Transactions are made on trustless smart contracts, and user info is never stored. An NFT marketplace consisting only of Uniswap V3 is groundbreaking, and Zoracles is focused on building around this solution in the near future for other DeFi opportunities.

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