The blockchain project says unsecured loans and large loans could start being offered by the DeFi sector if decentralized digital identifiers are deployed.
Metaverse claims that digital IDs are an important part of the infrastructure that is currently lacking in this fast-growing industry, despite allowing protocols to provide personalized services and enforce compliance.
Digital IDs usually consist of data, including a user’s search history, social media, username, national identification number, date of birth, and current location. The Metaverse team argues that this information can be well used without compromising privacy, as users will be free to grant protocols access to a limited set of unobtrusive information.
This may allow later protocols to assess the applicant’s ability to repay the loan and eliminate some of the risks associated with cryptocurrencies.
To illustrate how sensitive data can be used without revealing the identity of anyone, Metaverse pointed to encryption technology as evidence of anonymity. Examples might be confirming that someone is over 18 without seeing their birthdate, or assessing whether a borrower paid off a loan on time without knowing the lenders they had dealt with before.
The team told Cointelegraph, “On the occasion of our fourth anniversary, Metaverse is creating the next phase of decentralized office development focusing on decentralized digital identities and digital assets. With new features such as the Metaverse Virtual Machine (MVM), a hybrid consensus algorithm based on the substrate platform, and digital IDs. Decentralized, programmable and more, this development brings together the best of our old series and merges them with innovative new modules to create a Metaverse – a new reality. ”
Challenges and opportunities
According to Metaverse, the main challenge facing the crypto community at the moment is interoperability across platforms – ensuring that the same digital identity can be used across multiple blocks.
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The company hopes that over time, the digital identity solution known as avatars will be unified across encryption and the traditional economy, giving everyone the ability to securely manage their personal data and share it with third parties without revealing their identity. Avatars can also pave the way for the decentralized, trust-based business models to take over the Web3 ecosystem.
With payment giants like PayPal and Mastercard now including cryptocurrencies and blockchain, and Visa is studying Bitcoin integration, Metaverse believes digital IDs will play an important role in addressing the centralization threat.
In the first quarter of 2021, the project will unveil its new core infrastructure, the Metaverse, and launch the Hyperspace network. The technology will also be integrated into the gene financing protocol. Throughout the year, Metaverse plans to support developers wanting to create new DeFi products using this technology.
Metaverse was founded in 2016, making it one of the few projects to survive the harsh crypto winter of 2018.
In the coming months, the project believes there will be a number of strong arguments for digital identities that will provide an effective way to prove ownership of digital assets in an increasingly coded world. Metaverse also believes that this infrastructure can offer a 21st century approach to registering IP rights.
Metaverse claims to not only have facilitated millions of transactions, but it has also become a secure platform for 3,000 digital assets and 5,700 digital IDs. Blockchain plans to move to Substrate in 2021 – and it will pave the way for more fps transactions and smart contract functionality without compromising core values.