- Divine Research is offering unsecured loans, having issued over 30,000 short-term USDC loans since December, primarily to underserved global borrowers.
- Divine Research is using Worldcoin’s iris-scanning for fraud prevention and charges 20-30% interest. Despite a 40% default rate on initial loans, the platform aims to offset losses through interest and reclaiming free tokens.
- This resurgence marks a shift in risk appetite following the 2022 crypto collapses. The model relies heavily on identity systems and borrower honesty, with no collateral to reclaim in case of default.
Unsecured lending is staging a comeback in crypto, as a wave of new startups push high-risk microfinance strategies onto the blockchain, just three years after the sector’s collapse triggered mass bankruptcies across the industry.
At the center of the resurgence is San Francisco-based Divine Research, which claims to have issued more than 30.000 uncollateralised short-term loans since December.
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A Very Strange Mix
According to a report from the Financial Times, the company is using biometric verification from Sam Altman’s Worldcoin to vet borrowers and block defaulters from reapplying under new identities.
We’re loaning to average folks like high-school teachers, fruit vendors… basically anyone with access to the internet. This is microfinance on steroids.
Divine’s model focuses on loans under US$1,000 (AU$1,520), disbursed in Circle’s USDC stablecoin to borrowers primarily outside the US. Interest rates range from 20% to 30%, and borrowers are screened using iris scans to reduce repeat fraud. The firm pitches itself as an alternative for people underserved by traditional finance.
Anyone can provide liquidity. We’ve engineered the system such that after accounting for default rates and the interest rates on offer, providers will always make a profit.
Another entrant is 3Jane, which received USD 5,2 million (AU$7.91 million) in seed funding from Paradigm in June, the same VC group that backed FTX. Unlike Divine, 3Jane operates entirely on-chain and requires borrowers to provide verifiable data about crypto holdings, banking assets, or projected income. However, no collateral is posted, making defaults difficult to recover.
Unsecured Loans Are Back?
The re-emergence of unsecured lending follows Bitcoin’s new all-time highs and growing institutional curiosity. Even JPMorgan is exploring crypto-backed loans, as Crypto News Australia reported. All in all, we’re seeing a clear shift in risk appetite after the 2022 implosions of Celsius, BlockFi, and FTX.
Still, the structure remains fragile. With no claimable assets on default, the bets being made are on identity systems, borrower honesty, and data verification. It’s a risky mix that echoes many of the assumptions made before the 2022 crash.
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