Teller Finance, a project that creates an unsecured lending protocol for decentralized financing, has announced the launch of the alpha phase. This will allow specific users to receive a loan without having to provide collateral, as is the case with most other DeFi lending protocols.
Alpha Teller will only be available to holders of a non-fungible token called Fortune Teller NFT. The tokens will be sold on Thursday, half of the proceeds from the sale will go to the protocol’s liquidity pools, and the remaining half will be used to finance development. Basically, only $ 10 million of the total insured value is allowed.
NFT Fortunetellers will also present works by “various renowned artists” commissioned by Teller. The complete list will be available after the sale.
Teller Finance combines an unsecured lending protocol with a secured loan alternative. The unsecured platform is based on traditional credit rating scores used in the United States. Cashier users must connect bank accounts to a platform that calculates credit terms based on the credit risk algorithm. Factors such as a large bank account and a stable monthly income will affect the maximum loan amount and interest rate.
Credit risk scores are published on-chain by Teller Auditors, which uses a sub-circuit to connect cloud infrastructure to Teller’s blockchain and smart contracts. Loans are exchanged for either cryptocurrency or stack coins.
Secured cash loans work in the same way as platforms like Compound, and require users to provide security beyond the loan amount. This form of lending is often useful for creating long or short leveraged cryptocurrency positions.
Teller’s gradual distribution is accompanied by the choice of more and more protocols in accordance with a watchdog strategy that limits the potential costs of protocol errors. Alpha development is expected to take several weeks because the protocol allows NFT games and rewards.